Recently, the U.S. government issued a striking executive order allowing institutions and private sales to invest in cryptocurrency through 401K retirement plans. This decision is seen by industry insiders as a key factor that could trigger significant changes in the cryptocurrency market.

According to a research report by asset management company Bitwise, fixed contribution retirement plans, including 401(k), currently manage a massive amount of approximately $12.2 trillion. This figure far exceeds the current valuation of the global encryption market (around $4 trillion).

Bitwise's analysis points out that if only 1% of the assets in these retirement plans (approximately $122 billion) are allocated to Bitcoin, it could drive its price up to around $194,000. Even more astonishing is that if the allocation reaches 10% (approximately $1.22 trillion), the price of Bitcoin could even hit a high of $868,700.

It is worth noting that cryptocurrencies were once considered a 'no-go zone' for 401(k) retirement plans. However, the issuance of this executive order has changed that status. The order directs relevant regulatory agencies to expand the accessibility of alternative assets within 401(k) plans, placing cryptocurrencies alongside real estate, private sale, and other alternatives.

This policy change may encourage large financial institutions such as BlackRock and Fidelity to introduce spot Bitcoin or Ethereum ETFs for their clients, whether as a standard option or through self-directed brokerage windows, thus opening new channels for capital inflow into the encryption market.

According to data from the Investment Company Association, fixed contribution accounts provided by employers, specifically 401(k) accounts, account for approximately $8.7-8.9 trillion. Even if only 1% of this massive capital pool (around $87 billion) flows into the encryption market, it would be enough to reshape the current supply-demand balance, triggering significant price fluctuations.

However, we should also recognize that while this policy change brings great opportunities to the cryptocurrency market, it also comes with risks. Regulators need to establish clear fiduciary duty standards and eliminate legal obstacles to ensure that while seeking the best interests of depositors, they can also effectively manage investment risks.

Overall, the scale of the U.S. 401(k) retirement plan system far exceeds the current encryption market. If even a small portion of that capital flows into the encryption market, it could trigger significant changes in the market landscape. This potential capital flow could not only inject massive funds into the encryption market but also lead to significant price fluctuations, thereby reshaping the entire encryption ecosystem.