The president of the United States and his family are selling and promoting memecoins, bringing cryptocurrency directly into the political spotlight. At a Bitcoin convention in Las Vegas, the vice president told a crowd that crypto now has a champion in the White House. That statement marked a new era in Washington, where the U.S. government is taking a friendlier approach to digital assets.
The political shift is not limited to speeches. Before taking office, the new chairman of the Securities and Exchange Commission was a cryptocurrency investor and adviser. The Department of Labor recently removed its warning against putting Bitcoin or other cryptocurrencies into retirement portfolios. This means Americans saving for retirement, education, or a home may already hold crypto without realizing it.
Many retirement accounts include index funds that own shares in companies exposed to Bitcoin. One well-known example is the company formerly called MicroStrategy, now simply Strategy. Michael J. Saylor, its founder, said the rebrand fit the brand better, though the company still runs a shrinking software business. The real story is its large Bitcoin holdings, which make up most of its value. Investors in broad funds are indirectly exposed to this bet on digital currency.
Other major companies have followed. Coinbase, the largest U.S. crypto exchange, joined the S&P 500, giving mainstream investors automatic exposure. Tesla, led by Elon Musk, owns more than $1 billion in Bitcoin. Shares of these Bitcoin-heavy companies often trade higher than their actual digital assets, showing how much excitement surrounds them. But when Bitcoin falls, the losses hit investors as well.
The Securities and Exchange Commission has allowed exchange-traded funds to hold Bitcoin directly. That gives investors and institutions a way to buy Bitcoin without managing wallets or private keys. By April, there were more than 90 such funds, according to ETF.com. BlackRock’s iShares Bitcoin Trust is the largest, with more than $72 billion in Bitcoin. For May, it ranked third in all ETFs for cash inflows, trailing only Vanguard’s S&P 500 ETF and Invesco’s QQQ, which tracks the Nasdaq 100. BlackRock has also started adding small amounts of this Bitcoin fund into its portfolios as an alternative asset to help with diversification.
Crypto is spreading in other directions as well. Circle Internet, the company behind the USDC stablecoin, launched its stock on June 5 and quickly reached a valuation of more than $25 billion. Stablecoins like USDC are backed by U.S. dollars and marketed as safer ways to move money outside the traditional banking system. World Liberty Financial, a company partly owned by the Trump family, is also pushing into stablecoins. Treasury Secretary Scott Bessent recently told the Senate that stablecoin markets backed by U.S. Treasury bills could grow to $2 trillion or more. He said that was a reasonable figure and possibly even conservative.
That scale would place stablecoins in the center of global finance, raising questions about regulation and oversight. Supporters argue they make payments faster and cheaper. Critics warn that without strict rules, they could put the financial system at risk.
Despite the enthusiasm, skepticism remains. Geoff Kendrick, global head of digital assets at Standard Chartered in London, has studied Bitcoin in portfolios. He found that allocating one or two percent of a diversified portfolio to Bitcoin improved returns and reduced volatility. He noted that Bitcoin often moves independently from the stock market, especially during financial stress, such as the 2023 collapse of Silicon Valley Bank. Still, he and others caution that the allocation should stay small.
Bitcoin has had dramatic ups and downs. Its price crashed in 2022, dragging stablecoins down with it, but has since surged. Over two years, Bitcoin rose about 265 percent, compared with 39 percent for the S&P 500. Supporters argue this growth comes from increasing demand while supply grows only as designed by its code. Skeptics say it still lacks intrinsic value, unlike stocks or bonds, and trades more like commodities such as gold or oil.
For now, most experts agree that small doses of cryptocurrency can fit into diversified portfolios. Harry Markowitz, the Nobel Prize winner who created modern portfolio theory, called diversification the only free lunch in investing. That idea is guiding how funds include Bitcoin, Ethereum, and stablecoins today.
But if private cryptocurrency markets grow to trillions of dollars, the impact will be far greater. Retirement portfolios, mutual funds, and ETFs would be tied to assets that still lack clear rules. Political leaders from the president to the Treasury secretary are signaling strong support, while companies from BlackRock to Tesla continue to buy. Whether that support protects investors or leads to new risks is a question yet to be answered.
What is clear is that cryptocurrency has moved far beyond hobbyists and early adopters. It now sits inside retirement funds, index portfolios, and the S&P 500. The U.S. government is no longer treating it as a side issue. Instead, it is shaping how Americans save, invest, and plan for the future, whether they know it or not.
