The Government Accountability Office (GAO) unleashed a report about crypto assets in 401(k) plans, but it didn’t reveal much.
According to the GAO, industry data suggests that 401(k) investment in crypto assets remains low. But the report leaned more heavily on the Department of Labor (DOL) not having the data to systematically measure crypto holdings in 401(k) plans.
Crypto use in 401(k) plans remains low because the DOL has frowned on it, and there is no mention of this in the GAO’s summary.
GAO’s analysis of investment returns indicates crypto assets have uniquely high volatility, and their returns can come with considerable risk (we all know this). GAO’s simulation found a high allocation (20 percent) to bitcoin, the crypto asset with the longest price history, can lead to higher volatility than smaller allocations (1 and 5 percent). Further, GAO’s interviews with researchers and firms that develop crypto asset investment options indicate no standard approach for projecting the potential future returns of crypto assets.
