Latest news with #TheTruthaboutCrypto
Yahoo
a day ago
- Business
- Yahoo
Why a famed financial advisor thinks crypto should be up to 40% of your portfolio
Financial advisor Ric Edelman thinks your crypto allocation is probably too low. In a new paper, he highlighted the importance of allocating up to 40% of portfolios to crypto. It's a big change after he said a few years ago that allocations to crypto should be 1%. A top financial advisor has a surprisingly high recommendation for the percentage of a portfolio that should be allocated to cryptocurrencies. Ric Edelman, founder of advisory firm Edelman Financial Engines and author of multiple investing books, recently published a white paper detailing some new investment strategies — and some new thinking on crypto investing. Edelman recommended investors allocate at least 10% of their portfolio for crypto assets and, in some cases, as much as 40%. Most financial advisors would likely recommend a much lower crypto allocation, and not long ago, Edelman would have been counted among them. In his book "The Truth about Crypto," published in 2021, he said crypto should be a much smaller part of any portfolio, at about 1%. He's changed his tune, though, advocating for an investment strategy that's highly bullish on the continued growth of digital assets. "There's no logic to omitting an asset class that's outperformed all others for 15 consecutive years and is widely projected to continue doing so for the next decade or more," Edelman said in the paper. He cited historic performance data showing that portfolios with bitcoin have generated "higher returns with lower risk." That said, Edelman doesn't think all investors should allocate the same amount to crypto. His recommendation is that conservative investors allocate 10% of their portfolios to crypto, while moderate investors target 25%. For aggressive investors, it should be as much as 40%. "Owning crypto is no longer a speculative position; failing to do so is," he said. "A passive market-weighted index comprised of all asset classes would have 3% in crypto, so an investor who lacks crypto is now effectively shorting it." Edelman also criticized a popular investment strategy. He said that the 40/60 mix of stocks and bonds, something that many investors have used to guide their decisions for decades, is "dead." He cited "unprecedented rates of longevity" generated by "remarkable advances in exponential technologies." Therefore, Edelman sees the need for financial portfolios that can generate revenue for 50 years or more. As the paper makes clear, Edelman believes that the answer to this lies in further crypto exposure. In his view, the economy is currently in the "third evolution" of the internet, a phase driven by blockchain technology, which he sees as revolutionizing how money is transferred. "Blockchain technology is evolving into the internet of money, moving value at internet speed," Edelman said. "When you can move money as easily as sending an email, everything changes." As investor and crypto bull Anthony Pompliano recently highlighted, Edelman's statements are in line with arguments that bitcoin bulls have been making for years. However, Edelman is the first prominent financial advisor to advocate for such a high crypto allocation. Read the original article on Business Insider
Business Insider
a day ago
- Business
- Business Insider
Why a famed financial advisor thinks crypto should be up to 40% of your portfolio
A top financial advisor has a surprisingly high recommendation for the percentage of a portfolio that should be allocated to cryptocurrencies. Ric Edelman, founder of advisory firm Edelman Financial Engines and author of multiple investing books, recently published a white paper detailing some new investment strategies — and some new thinking on crypto investing. Edelman recommended investors allocate at least 10% of their portfolio for crypto assets and, in some cases, as much as 40%. Most financial advisors would likely recommend a much lower crypto allocation, and not long ago, Edelman would have been counted among them. In his book "The Truth about Crypto," published in 2021, he said crypto should be a much smaller part of any portfolio, at about 1%. He's changed his tune, though, advocating for an investment strategy that's highly bullish on the continued growth of digital assets. "There's no logic to omitting an asset class that's outperformed all others for 15 consecutive years and is widely projected to continue doing so for the next decade or more," Edelman said in the paper. He cited historic performance data showing that portfolios with bitcoin have generated "higher returns with lower risk." That said, Edelman doesn't think all investors should allocate the same amount to crypto. His recommendation is that conservative investors allocate 10% of their portfolios to crypto, while moderate investors target 25%. For aggressive investors, it should be as much as 40%. "Owning crypto is no longer a speculative position; failing to do so is," he said. "A passive market-weighted index comprised of all asset classes would have 3% in crypto, so an investor who lacks crypto is now effectively shorting it." Edelman also criticized a popular investment strategy. He said that the 40/60 mix of stocks and bonds, something that many investors have used to guide their decisions for decades, is "dead." He cited "unprecedented rates of longevity" generated by "remarkable advances in exponential technologies." Therefore, Edelman sees the need for financial portfolios that can generate revenue for 50 years or more. As the paper makes clear, Edelman believes that the answer to this lies in further crypto exposure. In his view, the economy is currently in the "third evolution" of the internet, a phase driven by blockchain technology, which he sees as revolutionizing how money is transferred. "Blockchain technology is evolving into the internet of money, moving value at internet speed," Edelman said. "When you can move money as easily as sending an email, everything changes." As investor and crypto bull Anthony Pompliano recently highlighted, Edelman's statements are in line with arguments that bitcoin bulls have been making for years. However, Edelman is the first prominent financial advisor to advocate for such a high crypto allocation.
CNBC
6 days ago
- Business
- CNBC
Bigger bitcoin HODL: Time for 10% to 40% of portfolio in crypto, say financial advisor Ric Edelman
Four years ago, financial advisor Ric Edelman went out on a limb in saying everyone should hold cryptocurrencies. But how much? Low single-digits was his recommendation. In his "The Truth about Crypto" book in 2021, Edelman said as low as a 1% allocation was reasonable. A lot has changed. This week, Edelman said financial advisors should be recommending anywhere from 10% to 40% allocations to cryptocurrencies, and he is aware it's quite a shift in his own thinking. "Today I am saying 40%, that's astonishing," he told CNBC's Crypto World in an interview. "No one has ever said such a thing." But the "why" is the more important thing. For one, it's because of the massive change, "the evolution of crypto in the past four years," he said. Four years ago, Edelman says, we didn't know if governments would ban bitcoin, or if the technology would be obsolete, and if consumers and institutions would adopt it. "Today, all those questions have been resolved," said Edelman, who heads the Digital Assets Council of Financial Advisors. "It's radically changed and is now a mainstream asset," Edelman added. For sure, the more mainstream crypto becomes, the more it will feature across investment portfolios. Bitcoin ETFs have been taking in billions this year, among the top asset classes in ETF inflows this year, one sign of crypto's arrival on the radar of more financial advisors and long-term investors. The other big shift Edelman sees longer-term, and just as important to his view of crypto allocation, is the end of the traditional 60/40 model of long-term investing, with 60% in stocks and 40% in bonds, which Edelman says is obsolete due to increased longevity, and life expectancy in the U.S., that has risen from 47 in the 1900s to 85 today, and is projected to potentially reach as high as 100 over the next 30 years if technological advances related to medicine proceed. "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," said Edelman. "Today's 60 year-old is kind of like yesterday's 30 year-old," he added. "You need to get better returns than you can get from bonds and you need to hold equities longer than ever before," Edelman said. And as that allocation model shifts away from the classic 40% bond allocation, he said crypto needs to play a much bigger role in investing. "Bitcoin prices don't move in sync with stocks or bonds or gold or oil or commodities," Edelman said. He added that investors are starting to recognize it as a "wonderful way to improve modern portfolio theory statistics. "The crypto asset class offers the opportunity for higher returns that you're likely to get in virtually any other asset class." Edelman said. Some analysts predict bitcoin will hit $150,000-$250,000 by the end of this year and $500,000 by the end of this decade. Edelman says, "that's a conservative estimate compared to what others are saying." Crypto hacks hit a new record in the first half of the year. According to TRM Labs, bad actors raked in over $2.1 billion in at least 75 different hacks and exploits, setting a new record. Attacks on crypto infrastructure, like stealing private keys and seed phrases or compromises of front-end software, accounted for over 80 percent of the funds stolen in 2025's first half. Trump housing advisor tells CNBC about crypto mortgage plan. Bill Pulte, the director of the Federal Housing Finance Agency, joined CNBC's "Money Movers" on Friday to discuss the plan he released this week to have Fannie Mae and Freddie Mac count crypto as a federal mortgage asset. Senate targets end of September for crypto bill. Senator Tim Scott, chairman of the Senate Banking Committee, said at an event on Thursday that legislation to establish rules for U.S. crypto markets will be finished by the end of September.
