Bitcoin allocations in 529 plans could boost returns, reduce risk, and help families better keep pace with rising college tuition costs.Executive Summary
Rising tuition costs, persistent inflation, and limited investment flexibility in 529 college savings plans are eroding families’ ability to save effectively for higher education. While the plans offer valuable tax advantages, they restrict investors to narrow, state-selected mutual fund portfolios that underperform relative to IRAs and HSAs. These limitations prevent households from accessing inflation-resistant assets and stronger long-term growth opportunities.This research evaluates how modernizing 529 plans to permit bitcoin allocations could improve returns and better safeguard education savings. Bitcoin has historically delivered strong long-term performance and offers diversification benefits due to its low correlation with equities. Portfolio modeling shows that even small allocations of bitcoin—1–2%—increase compound annual returns and Sharpe ratios, boosting portfolio efficiency without materially increasing risk.
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44 sats \ 0 replies \ @winteryeti 8 Dec
I'd be shocked to see 529 plans allow crypto investment, even with ETFs. They have been locked into the mutual fund market for years. You'll see crypto ETFs appear faster on regular retirement accounts with non-broker options first.
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