The U.S. Department of Labor (DOL) officially rescinded its 2022 guidance, which had warned fiduciaries to exercise “extreme care” before including cryptocurrencies in 401(k) offerings. The DOL clarified that the move isn’t an endorsement of Bitcoin or other digital assets but a return to a neutral position.
Still, the policy reversal is widely interpreted as a green light for greater institutional access to Bitcoin through retirement accounts. With approximately $8.9 trillion managed in 401(k) plans, industry analysts are forecasting a massive new demand channel for BTC.
Analysts Predict Bitcoin Demand Shock
Bitwise’s head of research in Europe, Angre Dragosch, called the DOL’s move “by far the bigger news” of the day, predicting an imminent demand shock. Bitwise analyst Ryan Rasmussen added that even a modest 1% allocation of 401(k) funds to BTC could inject around $80 billion into the market—double the inflows seen from the launch of U.S. spot Bitcoin ETFs earlier this year.
Forget the GME announcement.
— André Dragosch, PhD⚡ (@Andre_Dragosch) May 28, 2025
This was by far the bigger news today.
Approximately $8.9 trillion are managed in 401k plans in the US.
Bitcoin demand shock incoming. 🔥 pic.twitter.com/qprOCK27Ky
Bitcoin surged from $36,000 to $72,000 in Q1 2024 following ETF approval and has gained nearly 180% year-to-date. At press time, BTC was trading at approximately $107,000 after a slight pullback from its recent high above $111,000.
BTC to Target $120K Despite Minor Retracement
According to Glassnode, Bitcoin could soon test the $120,000 level. Its on-chain data identified this range as a key resistance zone, citing MVRV extreme deviation pricing bands as a reference. Meanwhile, short-term holder profitability has risen 16%, suggesting continued bullish momentum.
Also Read: Crypto Mining Stocks Plunge on Fed Fears as Bitcoin Stays Resilient Above $108K
Despite the brief dip, analysts like Axel Adler from CryptoQuant noted that current profit-taking activity is relatively muted compared to past cycles. BTC could rebound quickly, especially with over $10 billion in leveraged shorts vulnerable to liquidation above $113K.
Conversely, a drop below $104K could trigger cascading long liquidations, making the $104.4K–$106.2K region a critical liquidity zone to watch in the near term.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses
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