Capitalist Investor

Crypto & Retirement: Risky Bet or Smart Play, Ep. 330

• Strategic Wealth Partners

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Is crypto becoming too regulated to be worth the risk—or is government oversight exactly what it needs? In this episode, Derek and guest host Dave break down the recently passed GENIUS Act and its impact on the future of cryptocurrency, from stablecoins and decentralization to government regulation and retirement planning. They explore whether retirees (and pre-retirees) should still consider crypto in their financial plans—and how to think about crypto beyond just Bitcoin. Plus, tips on how to get started without betting the farm. 

Is crypto becoming too regulated to be worth the risk or is government oversight the best thing that could happen to it? We'll discuss the genius act and ask the big question. Should retirees and retirees still consider crypto in their long term financial plan? All right, well, we're back and better than ever this week. And, filling in for Tony who's on assignment. Dave. About again. Dave, how are you doing? I'm doing great, Derek. Great to be here. Happy to be back. Excellent, excellent. Well, at least we got a good topic this week to, to discuss. We, going to talk about the genius act. A little crypto. I was, I was, I was happy that Tony didn't put the kibosh on this episode because I'm sure he wanted to to talk about it at length. But you know, the crypto markets actually kind of been, on fire here lately. I've even even I have made a little bit of money by just doing nothing. Those the those are the diamond hands coming back into play. But, you know, real quick, you know, it's been in the news quite a bit, honestly. But what is what is the genius act? So, so, you know, so basically, the house passed the, the stablecoin bill, which is known as the guiding and establishing national innovation for us stablecoins. That's what genius stands for. And sending it for signature. The Digital Asset Market Clarity Act of 2025. Also in this bill, and the entire central bank Digital Currency Act, passed as well. The House approved the rules for the debate, for the three bills. That's like a procedural thing. So so they can they can vote on it. But essentially, you know, it is something everyone thought would, would never happen, which is, you know, the government stepping in and becoming a relative or, a regulatory, you know, oversight body for, you know, emerging crypto coins, crypto technology and all that good stuff. Yeah, there's a there's a lot in this act, right? A lot of, a lot of pieces, parts I think, you know, the on the positive side for, you know, investors, consumers, there's more of a framework in place now. There's more rules to the game. What has been maybe a little bit of a Wild West out there. It's, you know, they're trying to put some structure to it. So and that's I think on the, the positive side of the ledger, you know, the I this is a little bit outside of my lane. But. The investors that I think are most drawn to this space, the whole appeal is like that decentralization, you know, of the crypto, right. And getting away from the dollar and, and being a hedge for inflation. So it's kind of a yin and yang thing here. I'm, I'm curious to see how this is all going to play out. I can see both sides about how it might, you know, the space might lose some of its allure. Yeah. You know, it's, the yin and the yang is a great way to describe it because. Yeah, it's it seems to be doing good things and bad things all at once for for the crypto space. But but you hit the nail on the head, you know, the, the whole goal of crypto. And you know, I say specifically Bitcoin is, like you said, to be decentralized. So not tied to the government, not, overseen by the government. It's supposed to be a completely separate entity that, you know, and the government can't go in there. And, you know, if they rule on something, you know, and, and a lawsuit or a criminal case or whatever, the government just can't go in there and take your money. So it's meant to be completely separate. But at the same point in time, it was it is, though the wild West. Yeah. You know, there's you can anyone basically, with a little bit of knowhow can create their own digital currency out there? We've seen, you know, rug pulls, as they call them, where someone creates a coin, pumps up the value, and then sells all their all their coins, takes the money out and leaves everyone else high and dry. So definitely some positive protections being put in place. You know, one of the big ones is like reserve requirements. So to your point, you know, with the rug pull, you actually have to have enough backing your, your stablecoin or your crypto to legitimize it. But, you know, even even the opponents of the, of the act have said, like there's not enough it hasn't gone that far enough in terms of the, investor protection piece of this. And so you wonder, like, is there still opportunities for the, you know, bad actors to kind of take advantage of this space? Yeah. For sure. You know, the, you know, why, why the government cares and why, you know, it it has been such a big part of, Trump's, overall campaign. You know, like they've just mentioned their, they want it, they want these, especially the smaller coins to for that consumer protection to be backed by the US dollar. So again, that's probably a good thing for consumer protection, probably a bad thing for you know, decentralization. Yes. They're great, great stuff like great. You know great point with that. And it my other big takeaway in this is like the people are seeing an opportunity. Some of the big banks are getting involved. Now at one point like you know Jamie Dimon wasn't the biggest fan. Yeah. And now it's like JP Morgan is joining Bank of America Citigroup. They all want to have their own stablecoin. They see the the profit opportunity of what they can do in this space. And they're never going to let a, moneymaking opportunity pass them by. And you know the the there there's no way to avoid it when, if you decentralize things you know you're not regulating them at all. So you know tax evasion, money laundering, you know, promoting you know, illicit things like drug trade and things like that. Always a major concern. You know, I think a legitimate concern for the space, so, you know, with, with, with no oversight whatsoever, I suppose that would always be a big problem. Yes. I think the criminals are not going to be so thrilled with the with the act. It's going to make their life a little bit harder. But, you know, when you look at it, you know, take a step back the market is kind of like you said earlier, it's embrace all this news like crypto's been ripping this year. We're hip. We're hitting all time highs, or near all time highs on Bitcoin and Ethereum. And some of these names are really popping with all this momentum behind it. So it's really hard to see, at this stage for this not to run longer. Yeah for sure. So, you know, does does this oversight, help or hurt crypto? You know, that's kind of what what what we're kicking around here. I think I think, like, with everything else, in the investing world, that the more clarity and the more certainty there is around an investment, I think, you know, the better off that they do in the long term. So I do think this is what, this act is providing is, you know, clarity some, some guardrails, if you will, you know, to, to steal a term from, college football. Yes. And the nil, you know, that that is also the Wild West. So, you know, having some rules, some, some guard, some guardrails, and, you know, it, it could with that, with that clarity, you know, it could open up to even, you know, maybe like 4 or 1 K is being able to investors a certain percentage and in crypto and you know, really making it more accessible, I think the, the number that I always hear thrown around is something like 97% of people out there do not own crypto at all. So, you know, I think I think this act, while it may, you know, kind of crush the dreams of the libertarians and, you know, complete decentralization, I think it probably would, would lean towards helping the overall space. Absolutely. I think this, like you said, it opens the door for more institutions to to allow themselves or based on their rules, to be involved in the space because it was just too undefined. Yeah. And now there's some framework behind it. Okay. We can, you know, this is a more legitimate idea and we can offer this in different platforms in the for one, K is really intriguing. Because I think there would be, you know, a ton of interest, especially from the, the younger workers wanting to put some of those, some hard earned deductions and contributions into this space like it would be. It just makes too much sense not to do. For sure. So so the big question, you know, should crypto still be part of your overall retirement strategy? So say you're, you know, 55, six years old pre or retire, you know, prioritize. Easy for me to say a pre retiree. With retirement right around the corner. What do you think, Dave? You think you think crypto is can still be part of the overall strategy? I love the fact you're trying to corner me. I'm going to answer it this way. It's all it's all case by case. So depending on your objectives, you know, your profile, what you're trying to get out of it, there may be a there may be a room for, you know, 1 to 5 to 10% allocation depending on all those things. So I'm not going to say yes or no. But I still like the idea of because I don't really want to pick a winner in this race in terms of which coin makes the most sense. Yeah, I like the idea of, investing ideas that would benefit from this thing. Right. So the you're the energy revolution. Yeah. Or, you know, the the toll roads, the the coin base is like, how can we how can we invest in an idea that can't lose based on just the volume and the momentum behind this story? Yeah, absolutely. That's a fantastic point. And and that that is one of the more, yeah. I don't know honestly really here to talked about that much. I know we talk about it internally. But, you know, energy and other ancillary things related to the space, is a great way to, to get into it. You know, they have ETFs now. The, the make it a lot easier to invest in as well. But you know, I would, I would maybe probably move off my old position just a little bit. It's basically was, you know, only about what you can afford to lose type of situation. You know, I would I would probably, I would probably move it up to, you know, if you have between 2 and 5% of your overall net worth in crypto, you know, I don't think that is as big of a risk as it used to be. You know, certainly it's still a big risk. Certainly still a very, you know, volatile asset. We, you know, we've seen that through, you know, the last two years really, even with this most recent, upswing. So, so, yeah, you know, I think it's becoming more, more mainstream. But, you know, it's it's still going to be extremely volatile, with a lot of people trading on emotion. It definitely, definitely. And and like you said, I think this kind of re you know, retrench is the, the, the ranges of outcomes. Yeah. The way I'll kind of put it. And it's almost like this regulation or similar regulation raises the floor on the bad stuff that could happen, but maybe takes away from the ceiling in terms of the, you know, the ultimate gains that could happen if it was in a more unregulated space. Yeah. And I think that's a good transition to, to what we can close close with, you know, it's just don't go out there. Blindly buy it because, you know, you hear it on the news or the, you know, CNBC and everything's in green, you know, it's, if you want to get involved, you know, you need to understand, at least the basics of it, you know, understand the different types of coins that that you are thinking about investing in. Obviously Bitcoin is kind of the, the industry standard now, but, you know, almost 120,000 a coin. It's going to be, you know, hard to, to build up a, you know, a, a bank of Bitcoin. So, you know, I would say, like, like we've been saying for a while, if you want to get into the space kind of dollar cost, average your way in, you know, that's honestly what I've been doing. It actually worked out pretty well this year. You know, putting in, you know, $200 a month or, you know, $50 a month, whatever the case is, really can help, level out the the ride. Absolutely. There. So, well, Dave, you know, I think we covered a pretty well here. It's not a done deal yet, so, I think it still needs to get, debated about a little bit and then, ultimately signed by the president. Looks like they have the support now. So we'll see what the, the final, you know, touches are and we'll kind of monitor the situation from here. But thanks for filling in this week, Dave. We appreciate it. If you guys out there have any questions, comments, concerns, you know, hit us up at info@connect.com and we'll talk to you next week. The opinions expressed in the podcast. Are for general informational purposes only, and are not intended to provide specific advice or recommendations for any investment, legal, financial or tax strategy. It is only intended to provide education about the financial industry. Please consult a qualified professional about your individual needs.