Six months ago, Sens. Kirsten Gillibrand, D-N.Y., and Cynthia Lummis, R-Wyo. made a striking pitch during a CNBC interview: More Americans should feel comfortable investing their retirement funds in Bitcoin.
Since then, the value of all crypto has fallen by another one-third, and is now 70 percent below its peak, while the market has been roiled by panics and scandal. But Lummis? She doesn’t regret her savings advice.
“I'm very comfortable with making sure that people can include Bitcoin in their retirement funds because it's just different than other cryptocurrencies,” she told Semafor.
Lummis is one of crypto’s highest profile evangelists on Capitol Hill. She holds somewhere between $100,000 and $350,000 in tokens, according to her financial disclosures, and has shown love for the industry by photoshopping laser eyes onto her Twitter avatar.
Less known: She’s something of a Bitcoin purist. “I think the jury's still out on other cryptocurrencies,” she said. She appreciates Bitcoin’s hard-money qualities (only a limited number can ever be issued) and that, unlike some competing tokens, it’s decentralized (no one’s even sure who created it). At the moment, she sounds ready to buy the dip.
“I personally believe that because there are only going to be 21 million Bitcoin that are mined, that Bitcoin will go up,” she said. “That's a personal belief, just based on its scarcity.”
Lummis’ faith in Bitcoin pitted her against the Department of Labor this year when the agency warned against a plan by Fidelity to let clients invest their 401(K) savings in crypto. That was the backdrop of her CNBC appearance. “I think the Labor Department is wrong,” Lummis said at the time, emphasizing that Bitcoin ought to be “a slice” of a diversified portfolio.
Her colleague Gillibrand agreed, then plugged their bipartisan crypto bill. “That's why this piece of legislation is so important and why it's so timely,” she said, adding that regulating digital currencies would “create the safety and soundness in the market.”
Their legislation is considered friendly to the industry, in part because it would treat much of crypto as a commodity, with relatively light rules around trading compared to more heavily regulated securities.
Despite all the recent market tumult, Lummis said she intends to reintroduce the bill in January with only “minor changes,” like clarified definitions for terms like “digital assets.” She plans to meet with the SEC in the near-future after receiving concerns from them about certain “unintended consequences.” But the Wyoming Republican maintains the current bill would have prevented FTX’s implosion by adding a layer of regulation to the market.
Some are skeptical. “It's difficult for any policymaker right now to say definitively that their bill would have solved the problem of FTX,” said Mark Hays, a senior analyst at Americans for Financial Reform. (FTX founder Bankman-Fried is an investor in Semafor).
Gillibrand rebuffed multiple requests for an interview on Capitol Hill before her office sent a statement saying that the collapse of FTX “demonstrates the urgent need for a strong, comprehensive regulatory framework” like her bill with Lummis. Asked in the halls whether crypto forming part of Americans’ retirement savings was still a good idea, she responded: “I think you should just play the interview on CNBC and the answer is there.”