The financial advisor Ric Edelman has caused surprise by recommending a much greater allocation to cryptoactive in investment portfolios: between 10% and 40%, well above the modest 1% that suggested in his book “The truth about cryptocurrencies” published four years ago, in 2021.
Edelman argues that the ecosystem has experienced a deep transformation. In his opinion, the doubts that weigh on Bitcoin (BTC), as a possible government prohibition, their technological viability or their adoption by the public and institutions, have been overcome. Today, he says, cryptoactive ones are already part of the traditional financial system.
From his role as president of the Council of Financial Advisors of Digital Assets (DACFP), an organization based in Virginia, United States, Edelman anticipates the end of the traditional long -term investment model 60/40which assigns 60% of capital to shares (variable income) and 40% to bonds (fixed income).
According to Edelman, this model has become obsolete due to the sustained increase in life expectancy. “If you are a financial advisor and you have a 30 -year -old customer who is saving for your long -term future, you would recommend investing 100% of your money for variable income, because you still have about 50 years ahead,” he explained. “A 60 -year -old person today is, in many ways, as a 30 -year -old in the past.”
It should be clarified that The 60/40 model was designed at a time when life expectancy was lower and a significant part of the investment to more stable assets, such as bonds, to minimize risks, was required to allocate. However, today, with a greater life expectancy, people must make their money pay for a much longer period, even after their retirement.
In essence, the president of the DACFP argues that the 60/40 model has expired, because allocating bonds with low yields can be insufficient to meet financial needs throughout a longer life.
For the finance specialist, Fixed income has stopped fulfilling the role it had traditionally, so Bitcoin arises as an attractive option. “The cryptoactive class offers the opportunity to obtain higher yields from which it will probably obtain in virtually any other kind of assets,” he said.
He believes that one of the reasons that supports his position is the low correlation of the digital currency with other traditional assets. “Bitcoin prices do not move in synchrony with actions, bonds, gold, oil or raw materials,” express During his speech in an interview.
Finally, the advisor points out that Bitcoin projections for the future are encouraging. He indicated that investors are beginning to recognize it as “a wonderful way to improve modern statistics of portfolio theory.”
Some analysts estimate that their price could be between $ 150,000 and $ 250,000 at the end of this year, and reach up to $ 500,000 before the decade is over. For Edelman, these figures could even be conservative compared to other market estimates.
Their comments take place while Bitcoin remains quoting around 107,000 dollars, 5% below the historical maximum that reached about $ 112,000 last month.
Bitcoin gains ground in retirement savings strategies
As Cryptonoticias reported, in tune with Edelman’s gaze, recently the United States Department of Labor reversed a guide issued in 2022 that recommended extreme precaution regarding the inclusion of Bitcoin and other cryptocurrencies in retirement plans 401 (K), a type of retirement savings account that is very popular among US workers.
This change, in the midst of the growing perception of Bitcoin as a reserve of value, reflects greater institutional acceptance of cryptoactives, and It facilitates that a higher number of people take advantage of their potential within their long -term savings strategies.
The measure aims to revitalize the investment market for retirement in the United States, where cryptocurrency participation in the assets of plans 401 (K) is almost null. This regulatory update could accelerate the incorporation of Bitcoin in modern financial strategies, designed to face the challenges of a longer life and with greater economic demands.
