Ric Edelman, the best-selling author of “The Truth About Crypto,” has significantly changed his tune on cryptocurrency investments. He’s now recommending a much larger allocation than before.
A Big Shift in Crypto Investment Strategy
Edelman, a prominent financial advisor and founder of the Digital Assets Council of Financial Professionals, previously suggested a maximum of 1% of a portfolio be invested in crypto. He’s dramatically upped that recommendation to a range of 10% to a whopping 40%! In a CNBC interview, he stated, “Today I am saying 40%, that’s astonishing. No one has ever said such a thing.”
Why the Change? Edelman Explains
Edelman attributes this radical shift to the maturation of the crypto industry. He points out that many of the concerns surrounding crypto four years ago—government bans, technological obsolescence, and lack of adoption—have largely disappeared. He now views crypto as a mainstream asset.
Longer Lifespans and Portfolio Diversification
Edelman also argues that increased life expectancy necessitates a shift in investment strategies. With Americans living longer, traditional 60/40 stock/bond portfolios are insufficient. He suggests that Bitcoin, in particular, offers excellent diversification benefits, as its price doesn’t correlate with traditional assets like stocks, bonds, or gold. He believes crypto offers the potential for significantly higher returns than other asset classes. He uses the example of a 60-year-old today being similar to a 30-year-old from the past, needing higher returns and longer-term investments.
Edelman’s Bottom Line
Edelman’s new advice is a bold statement, advocating for a much more significant role for crypto in long-term investment portfolios. He emphasizes the potential for higher returns and diversification offered by this asset class. However, he cautions that this is a high-risk investment and investors should conduct their own thorough research.
