Edelman Advises 40% Crypto Allocation for Aggressive Portfolios

Ric Edelman, the founder of Edelman Financial Engines, has made a significant statement in the financial world by recommending that investors allocate up to 40% of their aggressive portfolios to cryptocurrency. This recommendation is seen as one of the strongest endorsements of crypto from the traditional finance world since Larry Fink's pivot towards digital assets.

Edelman's new message to investors suggests that failing to own digital assets is now the real speculative bet. He advises conservative investors to have 10% of their portfolio in crypto, moderate investors 25%, and aggressive investors 40%. Edelman's firm manages $300 billion for 1.3 million clients, and his views often influence other registered investment advisors across the country. This statement marks a major shift in how the financial advisory industry may approach crypto allocations moving forward.

Edelman argues that crypto can no longer be treated as speculative. He believes that a market-weighted index of all assets includes about 3% crypto, meaning any passive investor not holding crypto is essentially shorting the asset class. He also declared that the traditional 60/40 stock-bond model is no longer viable. Longevity and exponential technologies, he noted, require new asset allocation strategies. Edelman believes crypto is now essential for proper diversification.

The advisory stressed that there is no logic in excluding an asset class that has outperformed for 15 consecutive years. Edelman cited data showing that portfolios including Bitcoin consistently delivered higher returns with lower risks. These portfolios also had better Sharpe and Sortino ratios, lower standard deviation, and improved drawdown figures compared to those without Bitcoin. The statement presents crypto as more than a hedge or alternative play. It positions it as a core part of long-term financial planning.

Traditional finance analysts have called this announcement a turning point. They highlighted Edelman’s influence across the financial advisory industry, where he consistently ranks at the top of the list of U.S. advisors. While Edelman used the term “crypto,” Bitcoin likely dominates that allocation. Everyone acknowledges that Bitcoin is special, but sometimes people say crypto for speed. It’s like saying ‘passive’ in the fund world. Connotation can matter more than denotation.