As the conversation around retirement planning evolves, many investors are questioning whether private assets like cryptocurrency should have a place in their 401(k) portfolios. The recent moves by regulators and changes in political climate have brought this question to the forefront, but experts urge savers to approach this new option with caution.

The Department of Labor recently rescinded a guideline that previously warned fiduciaries to be extremely careful before adding crypto options to 401(k) investment menus. While this change could open the door for more crypto products to appear in retirement plans over time, the reality is that few plans currently offer cryptocurrencies, and most sponsors remain skeptical. Surveys indicate that only a small fraction of 401(k) plans make crypto available—even through self-directed brokerage windows—and most plan administrators cite concerns about volatility, risk, and the speculative nature of digital assets.

Cryptocurrency, by design, is an investment with high price swings and significant regulatory uncertainty. Even though major players and ETFs have made crypto more accessible, and political shifts may provide new avenues for inclusion, these changes don’t fundamentally alter the asset’s risk profile. Many financial advisors point out that cryptocurrencies lack the cash flow and historical record that underpin other asset classes, making it difficult to predict their long-term role in a retirement portfolio.

There’s also the matter of fiduciary responsibility: Plan sponsors are still wary of potential legal liability if participants face heavy losses as a result of volatile crypto investments. For individuals, this means evaluating personal risk tolerance, time horizon, and retirement goals before considering adding any private asset—including cryptocurrency—to their retirement savings.

As with any investment, diversification and prudence remain key. While the allure of high returns can be tempting, most experts recommend taking a cautious, well-informed approach before introducing private assets like crypto into your 401(k) strategy.