Author: Anthony Pompliano, Founder of Professional Capital Management; Translated by Golden Finance.
It is reported that the White House will have President Trump sign an executive order later on August 7, U.S. local time, allowing individuals to purchase Bitcoin and cryptocurrencies in their 401(k) retirement accounts. This is a huge step forward for the cryptocurrency industry that should have been implemented long ago.
It is estimated that the total amount of funds in all retirement accounts in the U.S. is about $43 trillion, including approximately $9 trillion in 401(k) accounts. In contrast, the entire cryptocurrency industry has a market capitalization of less than $4 trillion, so this executive order will open up a massive pool of funds flowing into Bitcoin and cryptocurrency assets.
Now many people will complain about the White House's actions. They will claim that Bitcoin is risky. They will scream about how inappropriate it is to empower individuals to allocate their retirement funds as they see fit.
But that's complete nonsense. First of all, every American should be allowed to manage their money as they please. What right does the government have to tell you how to use your money? If you want to invest in a new company, go ahead. If you want to invest in Bitcoin, no politician or regulatory body should stand in your way.
For critics, your job is not to prevent people from managing their money as they wish. Your task is to strengthen financial education in America so that people can make informed and rational decisions. If you don't want people to gamble, explain to them the high loss rates. If you don't want them to speculate on low-priced stocks, explain the benefits of investing in quality assets for long-term compounding.
The era of treating American citizens like fools is long gone. Savvy, independent retail investors are rising. Many of these individuals are outperforming institutional investors. Will there be mistakes and wrong decisions? Of course. But that is also a path to learning.
We must restore personal responsibility. We don't need a maternalistic state to micromanage the personal portfolios of our people.
In fact, if critics really want to speak for an important cause, they should start questioning why so many American retirement accounts are used to hold U.S. Treasury bonds. These assets are essentially destined to depreciate in the long term, and reports suggest that retirement accounts are optimized to prevent depreciation. So, if we are willing to let people invest their retirement accounts in high-risk U.S. Treasury bonds, why can't they buy Bitcoin?
For example, the iShares 20+ Year Treasury Bond ETF has shrunk by nearly 50% over the past 5 years. Outdated financial advisors are destroying the portfolios of the baby boomer generation with their outdated 60/40 portfolio allocations.
In the long run, U.S. Treasury bonds will only decline, while Bitcoin will only rise. So, unleash the potential of retirement accounts. Give people freedom. Let investors have the opportunity to save themselves from the impending financial disaster when they can only allocate to those 'safe' investments from the past.
These investors need a good investment opportunity because the dollar is being destroyed. Peter Mallouk of Creative Planning wrote, "Over the past 50 years, the purchasing power of the dollar for American consumers has decreased by more than 83%. Meanwhile, even when accounting for inflation, the S&P 500 index has risen over 150 times. Why do you need to invest..."
This is not rocket science. People just need to try to escape this crazy currency depreciation.
Mike Novogratz from Galaxy appeared on CNBC early in the morning, explaining the significance of opening the retirement account market to Bitcoin and cryptocurrencies.
Last night, Trump came out to talk about how crypto assets are eligible for 401(k) plans. I mean, that's a huge capital pool... The window for buying cryptocurrencies is continuously expanding... and prices are determined at the margin, think about what happens when there are hundreds of millions of new funds every day.
Bitcoin is digital gold. It is a hedge against endless money printing and against the endless poor fiscal policies of the entire world.
As long as the government cannot spend less than their income, you will continue to see Bitcoin appreciate.
So, ladies and gentlemen, let's get moving! Critics are furious, but they are on the wrong side of history. Bitcoin and cryptocurrencies will continue to exist. Now, they are about to enter the retirement accounts around you.
