Bitwise CIO Criticizes “Ridiculous” Fears Surrounding Bitcoin in 401(k) Plans

Matt Hougan, Chief Investment Officer at Bitwise, has firmly addressed concerns over Bitcoin’s perceived volatility in retirement accounts. He described the opposition to including Bitcoin in 401(k) plans as “ridiculous,” emphasizing that its risks are often exaggerated in comparison to traditional assets. His comments come amid a broader discussion about the role of cryptocurrencies in retirement savings.

Key Takeaways

Bitwise CIO Matt Hougan defends Bitcoin's inclusion in retirement plans, arguing that its volatility is often overstated.
He compared Bitcoin's volatility to that of Nvidia, stating that Bitcoin has been less volatile in the past year.
Despite regulatory shifts, access to Bitcoin in retirement accounts remains limited.
Critics, including Senator Elizabeth Warren, highlight potential risks associated with cryptocurrencies in 401(k) plans.

Bitcoin's Volatility Compared to Traditional Assets

During a recent interview on Investopedia Express Live, Bitwise's Matt Hougan confronted heightened anxieties regarding Bitcoin's volatility as it relates to retirement accounts. He dismissed attempts to prevent Bitcoin's inclusion in 401(k) plans as “ridiculous” and out of touch with how risk is evaluated in other market segments.

His statements coincided with U.S. Senator Elizabeth Warren pressing the Securities and Exchange Commission (SEC) for clarity regarding the protection of retirement savers should cryptocurrencies become included in defined-contribution plans. This timing underscores a growing rift between crypto industry advocates and regulatory bodies concerning the suitability of Bitcoin for long-term retirement investment.

Bitcoin vs. Nvidia: A Less Volatile Option

A key point in Hougan's defense lies in a comparison that he believes is often overlooked by regulators and plan administrators. According to him, Bitcoin has exhibited less volatility than Nvidia—a major stock in U.S. retirement portfolios—over the last year.

For example, Nvidia shares plummeted to around $94 in April 2025 but rallied to over $207 by October, representing a staggering 120% shift. In comparison, Bitcoin's price fluctuated between approximately $76,000 and $126,080 during the same timeframe, a variation of about 65%.

Bitcoin's Price Variation Compared to Nvidia

Despite this notable difference, Hougan pointed out that no one is advocating for a ban on 401(k) offerings of Nvidia stock. He articulated that Bitcoin is just another asset and, while it undeniably carries risk, that risk is frequently overstated when compared to conventional equities.

Hougan's remarks directly challenge the prevailing notion that the volatility associated with cryptocurrencies should exclude them from retirement plans. This ongoing debate has gained new relevance in light of recent regulatory developments in the U.S.

In August, an executive order from President Trump instructed the Department of Labor to reevaluate the limitations on alternative assets within defined-contribution plans, revitalizing the discussion around cryptocurrencies in 401(k)s. Furthermore, the Employee Benefits Security Administration, part of the Labor Department, had previously reversed a 2022 guideline urging caution regarding crypto investments and has now adopted a neutral stance, neither endorsing nor discouraging their inclusion.

Limited Access to Bitcoin in Retirement Accounts

Despite these regulatory changes, the availability of Bitcoin in retirement accounts remains scarce. Most workers can only gain exposure through self-directed brokerage accounts, placing the responsibility for investment decisions solely on the individual.

Currently, only a handful of providers such as Fidelity and ForUsAll offer pathways to Bitcoin exposure, typically through spot Bitcoin ETFs. Major firms like Vanguard have opted to remain on the sidelines regarding this opportunity.

Senator Warren has emerged as a vocal opponent of expanding cryptocurrency investments in retirement savings. In an open letter released on Monday, she cautioned that allowing cryptocurrencies in 401(k) plans may lead to increased fees, market manipulation, and drastic price fluctuations that could jeopardize retirement security.

Warren pointed out that for numerous Americans, retirement accounts serve as crucial financial lifelines rather than places for speculative investments. Additionally, she has requested SEC Chair Paul Atkins to clarify how the agency considers crypto volatility in asset valuations and whether it is analyzing manipulative behaviors in digital asset markets, with an answer due by January 27.

Hougan acknowledged that widespread adoption of Bitcoin in retirement accounts will not occur immediately. He noted that 401(k) providers are conservative institutions bound by fiduciary responsibilities and regulatory uncertainties. However, he remains optimistic that Bitcoin exposure will eventually become commonplace. He highlighted the increased institutional investment, notably through spot Bitcoin ETFs, as a stabilizing factor that has helped diminish Bitcoin's extreme volatility in recent cycles.

It is important to remember that Bitcoin's price history does exhibit greater drawdowns compared to broader market indices, such as the S&P 500, which typically experiences annualized volatility between 15% and 20%.