Elizabeth Warren sounds the alarm over this 1 asset in your 401(k) — and she’s still waiting for the feds to respond. How you could 'lose big' quickly

In a Jan. 12 letter to Securities and Exchange Commission (SEC) Chair Paul Atkins, she demanded a detailed account of how the agency intends to mitigate risks if digital assets such as Bitcoin are allowed into 401(k)s (2).

As of mid-February 2026, there’s no substantive public response from the SEC to her specific questions, despite a Jan. 27 deadline Warren set for a reply.

The SEC’s lack of a clear public response to Warren leaves a policy vacuum that could have real impacts on millions of Americans. Here’s how you can lose huge sums of money relatively quickly in an investment vehicle designed for reliable returns — not explosive volatility.

Volatility and conflicts of interest

At its core, the 401(k) plan is designed for long-term retirement savings. Roughly 70 million American workers rely on these plans for their nest eggs, according to Fidelity (3).

In contrast, the extreme volatility of cryptocurrencies make them better suited to traders and speculators than retirement savers. Despite its comparisons to “digital gold,” the CME Group found that the price of Bitcoin moves up and down somewhat alongside the movements of the stock market, which means it is far more volatile than a reserve currency or hard asset (4).

Cryptocurrency has also underperformed stocks in recent years. As of Feb. 11, 2026, Bitcoin and Ethereum, the two leading cryptocurrencies, have underperformed the Nasdaq-100 and S&P 500 by wide margins over the last five years — and that’s not even including the dividends you earn from stocks. Put simply, you would have made more money by buying a simple and cheap index fund in 2021.

Unlike index funds, crypto funds are also expensive. Crypto-related exchange traded funds (ETFs) can have expense ratios as high as 2.67%, according to ETF Database (5).

In her letter to the SEC, Senator Warren highlights how this volatility and these high fees could lead to bad outcomes for many vulnerable savers.

"There is no reason to expect that inviting plans to offer these alternative investments will lead to better outcomes overall for participants,” she wrote.

Warren also raised concerns about Trump’s deep involvement in the crypto industry and how that could weigh on the administration’s ability to regulate these assets.

“President Trump’s sudden embrace of the crypto industry appears to be driven by his own conflicts of interest and ability to profit from crypto free-for-alls,” Warren wrote. “Since the beginning of his second term, President Trump and his family have amassed over $1.2 billion in financial gains from crypto.”