- Ric Edelman urges up to 40% crypto allocation, citing industry maturity, ETF inflows, and changing investor longevity dynamics.
- The traditional 60/40 model is obsolete as investors seek higher returns and uncorrelated assets like Bitcoin and digital assets.
- Edelman sees Bitcoin as a mainstream portfolio asset and highlights crypto’s vital role in modern investment diversification strategies.
Founder of the $300 billion fund manager Ric Edelman has made a bold pivot on cryptocurrency. Speaking to CNBC’s Crypto World, Edelman now recommends investors allocate up to 40% of their portfolios to crypto assets, a major leap from his 2021 stance of just 1%.
Edelman believes the crypto landscape has evolved beyond early uncertainties. Four years ago, institutional adoption was uncertain, government bans were a risk, and the technology lacked clarity. Today, he argues those questions are resolved. Bitcoin is no longer fringe; it’s now a mainstream financial asset, backed by billions in ETF inflows and institutional participation.
Crypto Disrupts the Traditional 60/40 Model
The investment world is also moving past the outdated 60/40 stocks-to-bonds model. According to Edelman, increased life expectancy has changed everything. In the early 1900s, life expectancy stood at 47. Now, it exceeds 85 and could reach 100 within decades.
Consequently, older investors face decades more of financial responsibility. Edelman emphasizes that today’s 60-year-old must plan like a 30-year-old. Besides, bonds no longer offer competitive returns in the long run. Investors must turn to high-performing, uncorrelated assets to maximize yield and minimize risk.
Crypto’s Role in Modern Portfolio Theory
Moreover, Edelman asserts that Bitcoin and crypto assets behave independently of traditional markets. Their price action rarely mirrors stocks, bonds, or even commodities like gold and oil. Hence, their inclusion improves overall portfolio performance.
Additionally, crypto offers higher return potential compared to legacy asset classes. Edelman sees this as a key reason to increase exposure. He even called predictions of Bitcoin reaching $150,000 to $500,000 “conservative” given today’s momentum.
Edelman believes financial advisors must adapt. The industry can no longer ignore crypto’s place in asset diversification. He encourages advisors to offer clients a broader range of tools for future-proofing wealth.
