Senator Elizabeth Warren (D-Mass.) this week wrote to Securities and Exchange Commission Chair Paul Atkins, asking how the agency plans to protect investors holding cryptocurrencies in retirement portfolios, citing the asset class’s “volatility, weak investor protections and lack of transparency.”

“For most Americans, their 401(k) represents a lifeline to retirement security rather than a playground for financial risk. Allowing crypto into American retirement accounts creates fertile ground for workers and families to lose big,” Warren wrote.

In August, President Donald Trump signed an executive order laying the groundwork to add alternative assets, including crypto, into workplace retirement accounts. The Senate Committee on Banking meets Thursday to establish a framework for crypto oversight between the SEC and the Commodity Futures Trading Commission.

Some brokerages, such as Fidelity, already offer direct cryptocurrency investments in individual retirement accounts, and others, such as Charles Schwab, offer access to crypto exchange-traded funds. And 10% of U.S. adults with retirement accounts say they hold at least some crypto therein, according to a 2025 survey from NerdWallet. Younger investors are even more enthusiastic, with 18% of millennials and 14% Gen Zers reporting a crypto retirement holding.

As to whether a crypto holding is a wise or appropriate addition to your retirement savings, financial experts are split — but pretty much all of them acknowledge a certain level of risk.

“The objective for the average person is to have a safe, secure retirement plan,” Jerry Schlichter, founding partner of Schlichter Bogard, a firm known for lawsuits on behalf of employees over excessive fees in 401(k) plans, previously told CNBC Make It. “When you talk about new areas like cryptocurrency or private equity, these are fraught with danger for investors for a variety of reasons.”

Financial pros’ hesitation around crypto generally stems from two sources. One is the asset class’s volatility. Over the year that ended January 2025, bitcoin — considered more stable than other, more thinly traded digital coins, known as altcoins — was about five times more volatile than the broad U.S. stock market, according to iShares.

From 2015 through 2025, bitcoin posted two major calendar-year drawdowns: a 74% decline in 2018 and a 64% slide in 2022.

Still, over the past decade bitcoin is up more than 22,000% compared with a price increase of about 440% in the S&P 500.

Past performance is no guarantee of future results. This is true of any investment, but when putting together portfolios, crypto’s lack of a long-term track record is the other thing that tends to give financial advisors pause.

“Those traditional retirement guardrails are based on years of history,” says Melissa Caro, a certified financial planner and founder of My Retirement Network. “We don’t really have enough history on how crypto really performs.”

If you, like Schlichter, view a retirement account as a vehicle primarily designed to protect your assets, then maybe crypto doesn’t belong in your IRA or 401(k), he says.

But many money pros — including fiduciaries, who have a duty to act in their clients’ best financial interests — are warming to the idea, provided that certain precautions are taken.

“Fiduciary [responsibility] still applies, but you have a lot of tremendously smart investors saying that bitcoin is the best risk-reward investment right now,” says Joshua Brooks, a CFP and founder of Exponential Advisors.

If you’re interested in adding crypto to your retirement portfolio, here are three steps to help you invest responsibly.

1. Know yourself

“Crypto is a huge opportunity for folks, depending on your risk tolerance,” says Thomas Racca, manager of the personal finance management team at Navy Federal Credit Union.

Generally, the better you can handle an investment going down, the higher your risk tolerance. That may mean you’re more likely to hold onto or even add an investment that’s declined in value rather than panicking and selling.

It could also mean that you’re young and have time to let an investment bounce back. This is also known as risk “capacity.” If you’re a year from tapping your portfolio for income, you probably can’t afford a 20% dip in your retirement account. For someone planning to retire in a few decades, this isn’t as big a worry.

Given crypto’s track record of volatility, it’s really only appropriate for investors with a healthy appetite for risk and who know what they’re getting into, Racca says.

2. Do your research

Before investing in or recommending crypto, retirement savers and financial advisors alike should do their homework on digital assets, Brooks says.

“Just like any investment, you need conviction based on research,” he says. Maybe you want to hold bitcoin because you like its potential as an alternative currency. Maybe you like ether for its role in smart contracts.

Whatever your reason for holding crypto in a retirement account, it’s essential that you have a long-term thesis that you can periodically reassess. Otherwise, you’re just hoping things will continue to go up, says Brooks.

3. Don’t overextend

Even if you feel certain of cryptocurrency’s long-term potential, the asset class’s lack of history means that even the most highly convicted investors would be wise to tread carefully, says Caro.

“We just don’t have enough information,” she says. “You may look back and realize you were being too cautious, but that’s what retirement planning is all about.”

Financial planners generally recommend allocating a modest percentage of your portfolio toward risky assets such as cryptocurrency, with the thinking that a marked drawdown in that portion of your portfolio won’t derail your long-term plans.

Depending on your risk tolerance, time horizon and other income sources, Brooks recommends a maximum allocation of 5% to 15%: “Never more than you can afford to lose entirely.”

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