In brief
- Ric Edelman believes aggressive investors should consider a 40% allocation in portfolios.
- Edelman said the digital asset market will grow to a $19 trillion market cap.
- Bloomberg analyst Eric Balchunas described Edelman’s position as “the most important full throated endorsement of crypto from [the] TradFi world since Larry Fink.”
Ric Edelman, an influential financial advisor, is telling professionals to allocate up to 40% of clients’ portfolios to digital assets, lauding crypto as a must-have for investors in the modern age.
Digital assets should be among the go-to assets in an investor’s portfolio, alongside stocks and bonds, he said on CNBC’s Crypto World, reiterating his comments from earlier this month at a Texas conference for wealth management professionals.
At one point, Edelman, who co-founded Edelman Financial Engines, a $293 billion asset manager, advocated for a “low single digits” allocations to crypto, but he’s been swayed recently by “dramatically improved regulatory clarity and institutional engagement in crypto.”
For conservative portfolios, Edelman recommended that at least 10% of assets be allocated to crypto, with a 25% allocation for moderate portfolios, and 40% for aggressive investors.
Edelman, who is also founder of the Digital Assets Council of Financial Professionals, a trade group, cited advancements in technology leading to longer human lives as part of this basis for his recommendation, saying the average investor that’s alive today will live to be 100 years or older, requiring “portfolios to last far longer than most investors anticipate.”
In addition, Edelman said that the “continued growth of blockchain technology will propel its levels five or 10 times its current size by 2030.”
Whether an investor should only invest in Bitcoin, as opposed to other digital assets as well, should be between them and their advisor, Edelman told Decrypt on Monday. There could be other ways to get exposure to the digital assets industry, too, he added, pointing to stablecoin issuers, custodians, chipmakers, and exchanges.
“There is now a very healthy and diverse infrastructure that represents blockchain and digital assets, and some argue that only owning Bitcoin deprives you of engagement in that broader community,” he said.
As cryptocurrencies see continued adoption on Wall Street through products like exchange-traded funds, Edelman believes that Bitcoin will be worth $19 trillion by 2030. Today, the leading cryptocurrency is worth $2.1 trillion, according to crypto data provider CoinGecko.
With U.S. President Donald Trump’s administration reversing Biden-era restrictions on banks’ ability to offer services related to digital assets, the stage has been set “for massive engagement by the banking community,” Edelman added.
Although most financial advisors increase investors’ allocation to bonds as they age, Edelman said that professionals should allocate no more than 30% of funds to U.S. debt. In some cases, it makes sense to allocate 100% of a portfolio to stocks and crypto, he said.
Even a 90-year-old investor should have some exposure to digital assets, Edelman told Decrypt, saying their decision boils down to risk tolerance, as opposed to their age. The rationale, he said, could be that they’re investing with future generations in mind.
“If you’re in your 90s, you know that you’re not going to spend all of your money. You’re going to leave it to your children and grandchildren,” he said. “That means the money is not really yours. You’re merely the steward of that money for the benefit of your heirs.”
It was reasonable to wonder whether crypto would survive the regulatory headwinds that it faced not long ago, or whether the tech would be adopted by banks, Edelman noted. However, those questions have been settled, setting crypto up for a long-term future, he said.
On Monday, Edelman’s recommendation turned heads within the cryptosphere. Bloomberg ETF analyst Eric Balchunas said on X, formerly Twitter, that Edelman’s remarks could be “the most important full throated endorsement of crypto from [the] TradFi world since Larry Fink.”
The BlackRock CEO emerged as a Bitcoin backer last year after the approval of spot Bitcoin ETFs in the U.S. but touted tokenization’s prospects in 2022. More recently, Jamie Dimon, the CEO of JP Morgan, has put his long-run skepticism aside. In May, he said that the bank’s customers would soon allow clients to purchase Bitcoin.
Edited by James Rubin
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