Edelman Recommends 40% Crypto Allocation Amid Market Shift

Veteran financial advisor Ric Edelman has made a significant shift in his stance on cryptocurrency allocations, now recommending that financial advisors consider allocations as high as 40%. This dramatic change from his previous guidance of 1% reflects the evolving landscape of the cryptocurrency market and its increasing mainstream adoption.

Edelman, who leads the Digital Assets Council of Financial Professionals, attributes this shift to the resolution of past uncertainties surrounding cryptocurrencies. Four years ago, there were questions about whether governments would ban Bitcoin, if the technology would fail, or if institutions would adopt it. Today, these questions have been answered, and cryptocurrencies have become mainstream assets.

One of the key indicators of this mainstream adoption is the surge in inflows into spot bitcoin ETFs, which have attracted billions of dollars this year and are among the top-performing asset classes for new investments. This influx has put cryptocurrencies firmly on the radar of advisors and institutional investors.

Edelman also highlighted the erosion of the traditional 60/40 portfolio split between stocks and bonds. With longer life expectancies, retirees will need higher returns for longer periods. In this environment, Edelman argues that cryptocurrencies, with their uncorrelated performance, can enhance portfolio risk-adjusted returns and offer the opportunity for higher returns than virtually any other asset class.

Despite growing interest in Bitcoin, not everyone in traditional finance is convinced of its long-term staying power. Some market watchers have forecasted that Bitcoin prices could reach $150,000-$250,000 by year-end and even $500,000 by the end of the decade. Edelman called these projections “conservative” compared to other bullish estimates. Shunyet Jan, Head of Derivatives at Bybit, has projected that Bitcoin could reach $125,000 by the end of Q2 if current trends persist. Crypto analyst Scott Melker has said he believes Bitcoin could surge to $250,000 by the end of 2025, driven by institutional demand and a maturing market structure. However, Eric Semler, chairman of Semler Scientific, has said that many hedge funds remain skeptical about Bitcoin’s long-term viability, believing it may lose momentum after the Trump administration.