Bitwise CIO Hougan Defends Trump’s Executive Order Allowing Crypto in U.S. 401(k) Plans

Wall Street's crypto gatekeepers just got political cover.

### The 401(k) Revolution Nobody Asked For

Bitwise's chief investment officer Matt Hougan threw his weight behind the controversial move—arguing it's about choice, not coercion. The executive order doesn't force anyone to allocate to digital assets; it simply removes the regulatory handcuffs preventing retirement plans from offering the option. Hougan frames it as a natural evolution—like when 401(k)s first added international stocks or emerging market funds decades ago.

### The Institutional Floodgates Creak Open

This isn't about convincing your uncle to YOLO his retirement into memecoins. It's about letting accredited, professionally-managed crypto funds sit alongside traditional assets in defined contribution plans. The infrastructure already exists—Bitwise and others have SEC-reviewed vehicles waiting in the wings. The order just clears the path for plan sponsors to include them without fearing regulatory backlash.

### The Risk Paradox in Plain Sight

Hougan's core argument cuts through the noise: excluding an entire asset class might be riskier than including it. With inflation still gnawing at purchasing power, traditional 60/40 portfolios look increasingly anemic. Crypto's non-correlation offers a potential hedge—and keeping it locked out of retirement accounts effectively forces savers to bet against innovation. Of course, this assumes anyone still believes diversification works after three market crashes in fifteen years.

### The Fine Print Everyone's Ignoring

Here's where the finance cynics smirk: most 401(k) participants won't touch this. Auto-enrollment defaults will likely keep crypto allocations minimal, and financial advisors—still traumatized by 2022's crypto winter—will preach caution. The real impact? Legitimacy. Once crypto enters the retirement sanctum, the 'it's all a scam' narrative becomes harder to sustain. Wall Street wins either way—they collect fees on the new assets or get to say 'I told you so' when volatility strikes.

So grab your popcorn. We're about to watch retirement savers become the latest battleground in the war for crypto's soul—all while asset managers quietly calculate their new fee streams.

Hougan believes 401(k) is headed to crypto allocations

The retirement plan institution manages roughly $12.2 trillion, providing a significant capital inflow into the crypto ecosystem. For instance, a modest 1% allocation could mean roughly $122 billion being directed into the crypto market, while financial advisors and execs recommend a 2.5%-3% allocation of the retirement portfolio. 

Hougan believes retirement plan institutions are headed toward crypto allocations, with potential inflows expected to arrive late this year due to slow processing across the institutions. If actualized, BlackRock and Fidelity ETFs could greatly benefit, as they are the largest providers of retirement plans. 

So far, BlackRock’s IBIT ETF has recorded approximately $62.3 billion in cumulative inflows, while Fidelity’s FBTC has recorded $11.8 billion, based on on-chain data. As of now, bitcoin ETFs have a cumulative net inflow of $56.5 billion with a total net assets of $118.6 billion. That is roughly 6.5% of BTC’s total supply. 

Bitwise CIO highlighted how the legislative landscape will influence the crypto markets this year during an interview with an Investopedia host. Hougan stated that if the Clarity Act passes, the market is expected to reach new all-time highs across the cryptocurrency landscape. He said the Digital Clarity Act will provide a clear regulatory framework that will attract more institutional capital into the market. 

Hougan believes more ETFs will be launched this year, noting that the industry needs index-based crypto ETFs. He estimated that the market could attract at least $10 billion into the crypto landscape. He also disclosed that Bitwise is planning to launch index-based exposure ETFs, which will combine exposure to multiple crypto tokens for its customers. 

When asked about BTC’s 4-year cycle, Hougan said that 2026 will be a ‘negative’ year for Bitcoin. He attributed this to the diminishing significance of Bitcoin’s halvings. So far, not much BTC is being produced, and at the same time, interest rates are reducing.

According to Hougan, the 4-year cycle will be broken in 2026 and replaced by a 10-year grind.  

The crypto market faces uncertainty over criminal charges facing Powell

Meanwhile, the market is uncertain following the Department of Justice in the District of Columbia’s investigation into Fed Chair Jerome Powell, led by Jeanine Pirro. Powell defended the Fed, noting that the threat of criminal charges is a consequence of the Fed setting interest rates based on an assessment of what serves the public best rather than the President’s interests. 

“This is about whether the Fed will be able to continue to set interest rates based on evidence and economic conditions or whether, instead, monetary policy will be directed by political pressure or intimidation.”

–Jerome Powell, Fed Chair

Hougan also maintained his bullish forecast for BTC in 2026, echoing his forecast from last year, before the asset pushed to its ATH. Bitwise CIO said that BTC could push the price to over $200,000, calling the development potentially bigger than the approval of ETFs. As of now, institutional buying is countering the downside despite recent declines, according to Bitwise CIO. 

Matt Hougan believes that crypto has made a strong start in 2026, with the top 10 assets already experiencing significant price surges. For instance, BTC, ETH, XRP, BNB, and solana have recorded increases of 2.3%, 1%, 2.7%, 1.75%, and 7.8%, respectively, so far. He acknowledged that the market has moved past concerns about the October crash that caused a market drawdown.

Sharpen your strategy with mentorship + daily ideas - 30 days free access to our trading program