Ric Edelman, the founder of Edelman Financial Engines, has called on investors to allocate between 40% and 10% of their portfolio to crypto. The prominent financial advisor shared the take in a recent whitepaper for the Digital Assets Council of Financial Professionals ( DACFP). According to Edelman , who is also DACFP’s founder, the traditional investment model of 60/40 allocation to stock and bond is no longer useful. He attributed this to the massive technological advancements that have led to high longevity rates. Instead, he recommended that investors put their money in crypto while outlining the percentage to allocate based on their risk profiles. In Edelman’s opinion, aggressive investors should have 40% of their crypto investments, while conservative ones should have 10%. He said: “Conservative investors should now have a 10% crypto allocation. Moderate clients should place 25% of their portfolios in crypto, and aggressive clients should allocate 40% of their investments to crypto.” Interestingly, the veteran investor with 39 years of experience in the financial sector noted that investing in crypto is no longer a speculative trade. According to him, a passive market-weighted index of all asset classes would have 3% allocated to crypto, showing just how big the sector has become. Thus, anyone choosing to ignore the crypto sector is simply shorting it. Edelman bullish on crypto, says Bitcoin could reach $500,000 Meanwhile, Edelman made a bullish case for investors to allocate up to 40% of their portfolio to crypto. According to him, there is no reason anyone would choose to ignore an asset class that has outperformed the rest of the market for 15 consecutive years. In backing up his claim, he highlighted high-performing crypto assets and sectors, including the stablecoin sector. He noted that Tether’s massive $13 billion profits last year exceeded what several major US companies, including McDonald’s, BlackRock, IBM, and Ford, pulled in. Edelman’s summary of why everyone should invest in crypto (Source: DACFP) Beyond that, Edelman believes President Donald Trump’s win in 2024 has also set the stage for crypto’s good fortunes. According to him, the pro-crypto moves from the Trump administration and policy reversal from individuals and institutions are all signs that crypto is now a derisked investment. Unsurprisingly, the prominent financial advisor is particularly bullish on Bitcoin and has predicted it could be worth $500,000, noting that this is based on demand and supply. He noted that institutions’ massive accumulation of assets will continue to drive up their prices. He said: “There’s $750 trillion in global assets (stocks, bonds, real estate, gold, cash and collectibles). A mere 1% allocation would cause $7.5 trillion to flow into Bitcoin. That’s $377,000 per bitcoin. Add that to Bitcoin’s current price, and you get to about $500,000 per Bitcoin. It’s simple arithmetic.” Interestingly, Edelman highlighted how investors can get crypto exposure, from direct acquisition to equity proxies. His whitepaper also advises financial advisors to allocate part of their portfolio to crypto by including responses to clients’ common objections and criticizing advisors who do not recommend crypto to their customers. Reactions trail Edelman’s endorsement of crypto allocation Meanwhile, the whitepaper from Edelman has sparked a mixed but mostly positive reaction from experts. Bloomberg senior analyst Eric Balchunas described it as the biggest endorsement of crypto from TradFi since BlackRock CEO Larry Fink. According to him, this is because of Edelman’s status in the financial advisory community, where he is one of the most influential voices. He said: “This guy is Mr RIA. Manages $300b for 1.3 million clients. Tops the Barron’s list of America Advisors regularly.” Meanwhile, some in the crypto community believe that Edelman should have specified BTC as the asset to invest in rather than simply saying crypto. Balchunas noted that this should not be a cause for debate, as almost all investors, including Edelman, acknowledge that Bitcoin is the primary investment asset in the crypto sector. Interestingly, Bitwise European head of research André Dragosh does not agree that technological advancements killed the 60/40 model. Instead, he attributes it to rising inflation, noting that stocks and bonds underperform once inflation rises above 5%. However, he also recommended diversifying into hard assets such as Gold and Bitcoin. Cryptopolitan Academy: Want to grow your money in 2025? Learn how to do it with DeFi in our upcoming webclass. Save Your Spot
