Cryptocurrency has been gaining popularity as an investment option, but its volatility and lack of underlying value make it a risky choice for retirement savings.
The recent executive order by President Trump has made it easier to invest retirement savings in cryptocurrency, but experts warn that this may not be the best decision. Cryptocurrency prices can fluctuate rapidly, causing significant losses for investors. In 2025, Bitcoin plummeted from over $120,000 to under $85,000 in just a few weeks, resulting in a loss of 30% or more for those who invested near the peak.
Additionally, cryptocurrency offers neither dividends nor interest payments, making it a less attractive option than traditional investments. The Government Accountability Office (GAO) found that the five crypto assets available to 401(k) plans were four to 12 times as volatile as the S&P 500, and research shows that Bitcoin's volatility has been nearly 10 times higher than major fiat currencies.
Crypto fraud and theft are also a significant concern. The FBI reported that Americans lost a record $9.3 billion to crypto-related scams in 2024, with most scams targeting people over 60. Unlike traditional bank accounts or investment accounts, crypto losses are typically permanent and unrecoverable.