Bitcoin should be a part of retirement portfolios, says Senator Cynthia Lummis, R-Wyo.
Lummis was a featured speaker at the CNBC Financial Advisor Summit and shared her thoughts on cryptocurrency and specifically, bitcoin.
Saying that Bitcoin is “one of the strongest stores of value for the long run,” Sen. Lummis believes that investors should include it as a part of the retirement portfolio to increase diversification.
“I worry about having all of our retirement monies denominated in U.S. dollars,” she noted and agreed when asked if she thought that bitcoin could be more stable than the dollar in value in 20-plus years.
Lummis shared that she currently owns five bitcoin and bought her first one for $330. She also started the Financial Innovation Caucus based on Wyoming’s leading role in developing financial institutions to work with cryptocurrency. Her home state was the first to establish a set of laws that are now being used to charter new banks in cryptocurrency and integrate them into the traditional fiat currency world.
The senator’s remarks mirror other vocal supporters of bitcoin including U.S. financier and ex-Trump administration official Anthony Scaramucci, who recently launched the SkyBridge Bitcoin Fund and flatly states that bitcoin is a “retirement asset”.
Cognizant of many plan sponsors’ skittishness regarding bitcoin’s volatility, he says that is the very reason to include it in retirement accounts.
“People can trade within their 401k without tax consequences,” he said. “If we’re right about Bitcoin and I was your financial advisor, I would tell you that over the next 100 years, this is the technology that people are going to use for a large swath of commerce on the planet. These coins are scarce, and they’re going to be valuable. For that reason, I do think it’s appropriate to own a few in a retirement account.”
Bitcoin has made headlines and earned critics due to its rollercoaster market swings that send the cryptocurrency soaring by the thousands of dollars, only to see it fall by similar margins.
It’s this history that causes Scaramucci to offer caution:
Clients—including plan participants—should purchase Bitcoin in “in bite-size, digestible chunks so they can sleep safely at night.”
Lynn Brackpool Giles is a contributing editor to 401(k) Specialist. Giles is a former Managing Director of Communications and Consumer Services for the Financial Planning Association (FPA), where she oversaw all corporate, legislative, and consumer communications. In her current journalistic practice, she is a frequent contributor to numerous financial services industry publications.
