401(k)s are about YOUR retirement. If your risk tolerance is such that you want to pile into crypto and potentially go nuts with it, have at it.

But like with all investment vehicles you bear 100% of the risk and if it goes south…no bailout for you.

But that's not what happens. Which is why we don't let people do things that are self-destructive beyond certain limits. Because there are always externalities and consequences that aren't limited solely to the person who makes bad investment decisions.

Because when people are experiencing extreme poverty, it's makes life worse for everyone. It makes the society worse. When you have to pay more for shelters and food banks and for police to clean out parks and libraries filled with homeless people, when emergency rooms get clogged with folks who are unable to care for their basic needs, when families have to take in an elderly parent or relative because they blew their retirement funds on inappropriate investment vehicles....it never stays contained with the people who made the bad decision.

For better or worse, modern society is not a collection of atomized individuals who are separated by distance because we're primarily agrarian homesteaders and yeoman landowners. It's not like colonial days where you if you had a "work/save or starve" choice, it was only you that suffered if you ended up with "starve." That's not where we are any more. That's why we have these systems that impose some constraints on individual freedom - because we've lived through what happens when you don't, and the consequences are rarely limited just to the people who make the bad choices. So we don't let people make every bad choice they might possibly want to make.