As Donald Trump prepares to return to the White House, cryptocurrency is enjoying a new aura of legitimacy. But should Americans rely on it for their retirement?
Either way, that's what many appear to be doing. Twenty-nine percent of Americans view crypto as a legitimate part of their retirement strategies, according to
The site is run by pro-crypto groups including Coinme, the Seattle-based crypto exchange, so its findings should be taken with a grain of salt. But it raises an interesting question: Are average investors beginning to view crypto as no more of a gamble than the stocks and bonds normally included in retirement portfolios?
"Cryptocurrency is entering a pivotal phase where broader public understanding can unlock its full potential as both a financial tool and a mainstream investment," Neil Bergquist, CEO of Coinme, said in a
There is an obvious reason for this growing mainstream acceptance. In less than a month, Trump — a vocal bitcoin fan — will retake the presidency, likely bringing with him Elon Musk — an avowed Dogecoin supporter — in an advisory role.
The new administration will almost certainly be more pro-crypto than the one before it. During the 2024 campaign, Trump promised to fire SEC Chair Gary Gensler, who strictly policed crypto companies, and replace him with former SEC commissioner
Meanwhile, the Republican Party platform trumpeted its support for digital currencies.
"Republicans will end Democrats' unlawful and unAmerican Crypto crackdown and oppose the creation of a Central Bank Digital Currency," the GOP's
Then the election happened. On Nov. 5, Republicans won the presidency and both houses of Congress. Not surprisingly, the price of bitcoin has soared since then, surpassing $100,000 for the first time in late December.
Against that backdrop, many in the industry are confident that crypto will gain wider acceptance in 2025.
"With more support than ever in the White House and Congress, this coming year presents a unique opportunity for crypto to cross the chasm and become utilized as a generally accepted store-of-value and mechanism for payments," Bergquist said.
So does crypto deserve a place in Americans' nest eggs? Not all wealth managers think so.
"I am not recommending it to my clients," said Robin Hovis, a financial advisor at
To Hovis, bitcoin's astronomical price is not a selling point, but an example of "dangerous" volatility. And as an advisor, he's at a loss to explain why its value goes up or down.
"The value of a share of stock is supported by the earnings of the issuing company, which in turn is supported by the products they make or the service they deliver," Hovis said. "I can understand that and can therefore recommend certain stocks with confidence. But I don't know what gives crypto currency its value, so I have no idea what, when and why it would fluctuate."
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Other planners are more open to crypto as a retirement investment, but only for a certain kind of client — specifically, ones who can weather a "bumpy ride."
"Speculative investments can have a place in a client's portfolio if they have the right risk appetite and plenty of traditional assets to accomplish their goals," said Mike Zarrelli, a CFP at
Like Hovis, Zarrelli thinks it's important for clients to believe in an asset's intrinsic value, not just its price.
"Before investing in crypto, it's important to ensure the investment is not based on past returns, social media hype or FOMO [fear of missing out], but rather on conviction that the underlying blockchain technology will have a widespread use case in the future," he said. "FOMO, fear, and greed aren't real investment strategies."
Many advisors emphasize that clients shouldn't solely rely on crypto to fund their retirement. But it can act as a diversifier, since its fluctuations often diverge from those of the stock market. The key is that the portfolio must actually be diverse.
"Crypto should not replace traditional retirement investments like stocks, bonds or mutual funds," said Georgia Lord, head of financial planning at
Lord also made another point: The political environment for crypto may be about to get much more favorable — but it could just as easily change back.
"The legal and regulatory environment for cryptocurrencies is still evolving, adding uncertainty and instability," Lord said.
For planners like Hovis, this only adds to crypto's unsuitability for retirement planning.
"There are better options for your savings, including growth stocks and mutual funds," Hovis said. "All that glitters is not gold."
