Financial Advisor Ric Edelman Sees ‘Tremendous Investment Opportunities’ in Bitcoin
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Ric Edelman is the founder of Edelman Financial Engines and RIA Digital Asset Council. He is the writer of several finance books, and he is also the host of a weekly radio show on personal finance: The Ric Edelman Show.
Edelman points out an interesting paradox about financial professionals:
“The more talent you have, the more professional designations, the more college degrees in this space you have, the more difficult it is to get your head around bitcoin.”Ric Edelman
Most of the financial professionals who have been in business for a long time and are “very successful, very talented, and experienced,” Edelman states, are missing the boat for the opportunities offered by the new asset class as their understanding of cryptocurrency, including bitcoin, is not enough.
The financial advisor, in his comments, uses bitcoin as a representative of all types of digital assets: “It’s important to recognize that this is a completely new and different asset class that doesn’t have anything in common with anything else we’re familiar with: stocks, bonds, real estate, oil, gold, commodities.” Edelman further opined:
“This is new and different and it’s the first genuinely new asset class in about 150 years […]. It has tremendous investment opportunities.” Edelman proposed investing small amounts at the beginning to avoid the risk: “we need to recognize that bitcoin and digital assets are non-correlated assets” to traditional investments, he stressed. Making them an “ideal addition to a diversified portfolio, […] you lower the risk while allowing yourself to improve returns.”
Paul Tudor, a well-known hedge fund manager, recently made a similar comment on the additional role of cryptocurrencies. He recommended acquiring cryptocurrencies in a way that constitutes 5% of portfolios, adding that he likes cryptocurrency as a portfolio diversifier.
Although Ric Edelman acknowledges the volatility and unpredictability of bitcoin’s price, he still asserts that there is enough upside potential when allocated 1% or 2% of the portfolios for bitcoin investment. “This can be a materially beneficial way to improve your overall returns over the long term,” Edelman argued, stressing that “it does not take much to have a material impact on your investment portfolio.”
Financial advisor Edelman also shared his opinions on central bank digital currencies (CBDCs) and non-fungible tokens (NFTs). With blockchain technology and digital assets, he said that NFTs and CBDCs are “the most impactful commercial innovations since the development of the internet itself.” He declared: “This is huge. It’s going to have a tremendous impact on global commerce.”