Crypto in a 401(k): the DOL rule status and what plans offer

Where does the rule stand?

Two Labor Department releases are the record, and neither is a rule. On March 10, 2022 the Department told plan fiduciaries to “exercise extreme care” before adding a crypto option to a 401(k) menu [1]. It named its worries: wild prices, the odds that a saver would not grasp the risk, custody, valuation, and rules still in flux [1]. It said it would run an investigative program aimed at plans that offered crypto [1].

On May 28, 2025 the Department rescinded that release in full [2]. The 2025 release says the “extreme care” standard is not in ERISA and differs from the normal fiduciary duties [2]. It goes back to what it calls the Department’s historical approach: it neither endorses nor disapproves of a fiduciary who puts crypto on a plan’s menu [2].

That is the whole record as of the date on this page. A rescission is not a rule that allows anything. It removes a warning and leaves the duties of prudence and loyalty in place [2]. If a rule lands after this page’s date, this page is behind it, and the date at the top says so.

What does a plan actually offer?

A 401(k) menu is chosen by the plan’s fiduciaries, and the 2025 release puts the choice back on them with no thumb on the scale [2]. So the answer is plan by plan. A plan that lists a crypto fund on its menu offers it. A plan that does not list one does not, and the saver cannot add it.

The 2026 limits for the plan are set by the IRS. The employee limit is $24,500, the catch-up at 50 or older is $8,000, and a higher catch-up of $11,250 applies at ages 60 through 63 [4] [5]. Those limits apply to the plan, not to what it holds.

What is a self-directed brokerage window?

Some plans open a brokerage account inside the plan. Through it a saver can buy things the menu does not list. The 2022 release named that route: it warned that fiduciaries “allowing such investments through brokerage windows” should expect to be questioned [1]. The 2025 rescission withdrew that warning with the rest [2].

In plain words, a window is a door the plan chooses to open. What can be bought through it is set by the plan and the broker. A spot bitcoin ETF is a fund share, and a broker can hold one. Whether a given plan’s window allows it is a fact about that plan, and it is not stated here for any plan.

How does a rollover to an IRA work?

The path most people take is a rollover. It moves the balance out of the plan and into an IRA the owner directs. A rollover is a tax-free distribution from one plan that goes into another within 60 days [3]. Once in an IRA the assets are the owner’s to direct, and the crypto IRA guide covers what an IRA can hold; an IRA takes a rollover without the cash-only rule [6].

There are two ways to move the money, and the difference is withholding. If the plan pays the owner, the payer must withhold 20% of it [3]. With a direct rollover the plan pays the IRA’s trustee and nothing is withheld [3]. Any taxable part not rolled over, the withheld part included, is income in the year paid [3].

The one-rollover-per-year rule is an IRA-to-IRA rule: one rollover from an IRA to another IRA in any 1-year period, no matter how many IRAs the owner has [3]. The IRS says it cannot waive that rule [3]. A plan-to-IRA rollover is a different move, and the steps above are the whole of it. Inside the IRA, the ETF income calculator shows what a traditional account does to a bitcoin income fund’s payouts.