Ric Edelman, a prominent US financial advisor, has recommended a shift from conservative to a robust portfolio allocation to Bitcoin.
Edelman, who is the head of the Digital Asset Council of Financial Advisors, shared this narrative in a recent interview with CNBC. He based his newfound claims on several variables, including Bitcoin’s mainstream emergence and the suboptimal performance of existing investment models.
Top Advisor Says Bigger Bitcoin HODL
Four years ago, Edelman recommended just 1% portfolio exposure to Bitcoin. At the time, Bitcoin was still in its early development stage, marked by volatility and uncertainty.
He raised questions then about mainstream acceptance, stating it was unclear whether governments would ban Bitcoin or if the technology would become obsolete in the future. These uncertainties caused the conservative 1% recommendation.
Meanwhile, the narrative is changing for Bitcoin, and Edelman acknowledged this yesterday. He stated that all the questions around Bitcoin and its technology have been answered. As a result, his new recommendation is a bigger HODL.
The top advisor noted that Bitcoin has undergone a radical transformation and is now a mainstream asset. As a result, he advocates that financial advisors instruct clients to allocate between 10% and a staggering 40% of their portfolios to Bitcoin and cryptocurrencies.
Bitcoin’s Rise to Mainstream Adoption
Remarkably, Bitcoin’s mainstream push gained momentum following the launch of the US Bitcoin spot exchange-traded funds (ETFs) in January 2024. The investment funds have not just raked in billions of capital into the Bitcoin ecosystem but also successfully drawn global attention to the pioneering cryptocurrency.
Now, nation-states like Pakistan and the UAE, as well as public companies like MicroStrategy and Metaplanet, are continually investing in Bitcoin. Firms such as Barclays Bank, Avenir, and Goldman Sachs have also gained exposure to Bitcoin through ETFs, and many believe that institutional adoption is still in its early stages.
With this evolution, Edelman has called for a 40% allocation to Bitcoin.
60/40 Investment Model Obsolete
Meanwhile, Edelman cited the inefficiencies of the conventional 60/40 investment model as another reason for a shift to a more robust Bitcoin exposure. For the uninitiated, this model recommends a 60% portfolio exposure to stocks and 40% to bonds.
He emphasized that as life expectancy in the United States continues to increase, the moderate returns from stocks and bonds have proven insufficient. However, Bitcoin’s proven upside potential offers better returns and should be an integral part of a modern investment portfolio.
This theory proves to be true, as Bitcoin has outperformed all traditional asset classes over the past decade.
Moreover, its trajectory appears to be heading further upward, as analysts have predicted that Bitcoin could reach $500,000 or $1 million this bull cycle. In the longer term, Michael Saylor has projected a rally to $13 million per coin.
DisClamier: This content is informational and should not be considered financial advice. The views expressed in this article may include the author's personal opinions and do not reflect The Crypto Basic opinion. Readers are encouraged to do thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.
