The influential financial advisor who wrote the 2021 book “The Truth about Crypto” is reportedly increasing his recommended investment allocation for crypto.
CNBC reports that Ric Edelman, who previously said that allocating as much as 1% to crypto was reasonable, is now saying that financial advisors should recommend allocating between 10% and 40% to digital assets.
Says Edelman in an interview with CNBC’s Crypto World,
“Today I am saying 40%, that’s astonishing. No one has ever said such a thing.”
The founder of the Digital Assets Council of Financial Professionals is now more bullish on crypto assets amid the massive changes in the industry.
According to Edelman, Bitcoin and the broader crypto space faced numerous uncertainties four years ago – from the possibility of government bans on BTC, to concerns about blockchain technology becoming obsolete, to questions about whether digital asset adoption would gain meaningful traction.
“Today, all those questions have been resolved. It’s radically changed and is now a mainstream asset.”
Edelman also says that Bitcoin and crypto should play a bigger role in long-term investment strategies as life expectancy in the US increases.
According to the financial advisor, allocating 60% in stocks and 40% in bonds no longer works, given that Americans can live up to 85 today, or even much older with advances in tech and medicine.
“If you’re a financial advisor and you had a 30-year-old client who was saving for their long-term future, you would tell them to put 100% of their money in stocks, because they have 50 years to go. Today’s 60-year-old is kind of like yesterday’s 30-year-old.
You need to get better returns than you can get from bonds, and you need to hold equities longer than ever before.”
Edelman notes that Bitcoin is a great portfolio diversifier as it doesn’t appear to be correlated with the performance of other asset classes. He also says that digital assets tend to outperform stocks, bonds, gold and others.
“Bitcoin prices don’t move in sync with stocks or bonds or gold or oil or commodities… The crypto asset class offers the opportunity for higher returns than you’re likely to get in virtually any other asset class.”
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