The directive tells the Labor Department, the SEC, and Treasury to revisit constraints on plan menus, opening the door for defined contribution plans to add sleeves tied to Bitcoin and ether through pooled vehicles.
The focus now is on the size of the default crypto allocations and the number of plans that implement them, since those factors will determine actual investment flows more than the policy announcement itself.
A quarter of plans deploying a 0.25% sleeve would equate to roughly $7.6 billion in structural bids sourced from payroll contributions and employer matches. The size of these modeled flows turns on two levers that plan sponsors control, the default percentage and the share of plans that implement it.
That same structure can host a small crypto sleeve inside a diversified glide path, and the paycheck cadence turns that sleeve into a steady primary-market bid for the underlying ETFs that hold spot Bitcoin or Ethereum. The result goes beyond a single surge toward a programmatic flow that arrives on payroll cycles and rebalancing dates.
The glide path math frames realistic ranges for 2026. Using ICI’s DC base, a 0.10% default across 10% of assets points to about $1.22 billion of crypto demand. A 0.50% default across 25% of assets points to about $15.3 billion, while a 1.00% default across half the market would reach about $61 billion.
Modeled flows using $12.2T US defined-contribution base; values are theoretical and illustrative.
If sponsors weight sleeves toward Bitcoin at launch, Ethereum still absorbs a measurable share once ETH ETFs are included on platforms, though the split depends on investment policy statements and recordkeeper support. These figures are mechanical translations of defaults and adoption into dollars, not forecasts of market impact.
For crypto markets, the mechanism matters. If plans fund sleeves through spot ETFs, new contributions translate to primary creations when shares exceed inventory, which feeds through to underlying coin demand via authorized participants.
That transmission channel ties adoption inside DC plans to the ETF primary market rather than secondary swings, which is why the default percentage embedded in TDFs and CITs will matter more than menu headlines.
The next milestones sit with agency guidance, product filings, and recordkeeper integrations, then plan committee updates to investment policy statements. The flows, if implemented, would arrive on a schedule, and the order moves the 401(k) discussion from permissions to allocation math.
