“There is no doubt that bitcoin will be an investment option in 401k plans,” Ric Edelman emphatically said. “Within the next two to three years, it’ll be your routine offering in 401ks around the country.”
It’s a bold prediction from the advisor, author, entrepreneur, etc., especially considering recent crypto headlines. Many believe the bombshell FTX collapse, and subsequent bankruptcy, is the nail in the bitcoin retirement plan coffin, yet Edelman isn’t buying it.
Granted, the Founder of the Digital Assets Council of Financial Professionals (DACFP) and the author of The Truth About Crypto has a sizable dog in the hunt.
“The FTX debacle has no bearing on the question of whether bitcoin should be allowed in 401k plans.”
Ric Edelman
“The FTX debacle has no bearing on the question of whether bitcoin should be allowed in 401k plans,” he argued in a recent interview with 401k Specialist. “That’d be like saying stocks should be prohibited from plans because Bernie Madoff stole $60 million in a Ponzi scheme in the stock market. FTX appears to have been yet another fraud, like so many others we have seen in every asset class—stocks, bonds, gold, oil, real estate, and commodities. In fact, the [401k] plan is actually the best place for bitcoin since the plans are operated so prudently with massive levels of professional oversight.”
He’s pushing ahead and believes in cryptocurrency’s future in retirement plans and beyond, and he is out with a certificate in blockchain and digital assets to help educate advisors.
“We’re trying to accomplish two things with the designation,” he explained. “First is to help advisors gain fluency in this subject. Despite all their years of experience and expertise, they have no knowledge of how this asset class works, its role in a diversified portfolio, or its ability to help clients with everything from tax and to estate planning, and even divorce planning.”
The second is to help them brag about that fact.
“It’s one thing to be knowledgeable, but another to let people know you’re knowledgeable,” Edelman added. “Having the certificate is a way to demonstrate to your clients that you are staying current with the latest trends and opportunities in the industry.”
Staying current is an ongoing issue, given the growing average advisor age and pushback to newer—and unfamiliar asset classes.
“It’s not a question of pushback; it’s a question of indifference,” he countered. “Many older established advisors, more than half of this industry, take the attitude of, ‘Why should I care? I’m running a big, successful business. I have a lot of clients and a lot of assets. Everybody’s happy.’ My response is, ‘Fine, stay that way, but delegate this to one of your younger advisers. Somebody in your firm needs to be the go-to person for client inquiries and services. It doesn’t need to be you, but someone needs to be able to do it.”
Noting the massive levels of emotion crypto engenders among investors, he’s unsure why. He speculates that fear and a certain disdain that it was developed in the tech world, as opposed to finance, as reasons.
“If all you ever do is look at bitcoin’s price, you’d swear that it’s a tulip bulb or a Beanie Baby and that further fuels advisor attitudes that it’s either a fad or a fraud. It’s why we encourage advisors to go beyond price volatility and look at the underlying technology to examine if there’s a there and, if so, what is it and why.”
Claiming blockchain technology is fundamentally innovative software that allows businesses in every category to operate faster, cheaper, and safer than existing technology allows, he believes it’s as transformative as the internet in the 1990s.
While other high-profile crypto investors and advocates like SkyBridge Founder Anthony Scaramucci believe it will one day be a fiat currency, Edelman is more nuanced.
“There is no doubt there will be a digital dollar,” he concluded. “A digital dollar is under development by the Fed right now. It’s widely expected that it will be in place within the next five years, certainly by the end of the decade. That is true of every central bank around the world. Those digital currencies are separate and distinct from digital assets such as bitcoin, Ethereum, and thousands of others. They will peacefully coexist just as dollars and stocks exist today.”
SEE ALSO:
• FTX Fall Reignites Concerns About Crypto in 401ks
• Ric Edelman’s ‘22 Predictions for 2022’ Center on Digital Assets