Bitcoin’s journey from obscurity to mainstream financial portfolios has been nothing short of remarkable. Once dismissed by traditional investors and ridiculed by financial experts, Bitcoin is now being seriously considered—even embraced—by prominent names in the industry.
In its early years, Wall Street veterans and legacy investors largely ignored or mocked the cryptocurrency. But the tide began to shift when influential figures like Paul Tudor Jones III, Kevin O’Leary, and former critic Ray Dalio began allocating a small portion of their portfolios—typically no more than 5%—to Bitcoin.
Now, the narrative has changed dramatically.
A Bold New Allocation Strategy
According to a recent CNBC report, Ric Edelman, founder of the Digital Assets Council of Financial Professionals, has radically updated his stance. Four years ago, he advised conservative investors to limit their Bitcoin exposure to just 1%. Today, that number has skyrocketed.
“Today I am saying 40%, that’s astonishing. No one has ever said such a thing,” Edelman stated.
His recommendation to allocate up to 40% in Bitcoin marks a significant departure from traditional thinking. And while it may seem extreme to some, Edelman argues it’s a reflection of how much the financial landscape—and Bitcoin’s position in it—has evolved.
From Banned to Backed
Years ago, the threat of regulatory crackdowns from countries like China or the U.S. kept many investors on the sidelines. Now, several nations, including the U.S., are actively exploring ways to accumulate Bitcoin as a reserve asset. Institutional adoption has surged, and Bitcoin is increasingly being viewed not as a speculative play, but as a legitimate long-term store of value.
The 60/40 Portfolio Is Obsolete
The traditional 60/40 portfolio split—60% in stocks, 40% in bonds—may no longer be sufficient, Edelman says. With changing demographics and longer lifespans, even older investors need stronger long-term returns.
“A 60-year-old today is kind of like a 30-year-old from a generation ago,” Edelman explained. “They need better returns than bonds can offer and must hold equities—and alternatives—longer.”
That’s where Bitcoin comes in. As Edelman points out, crypto can significantly enhance modern portfolio theory metrics, offering higher potential returns and better diversification than many traditional assets.
Final Thoughts
Whether you’re a cautious investor or a forward-thinking advisor, Edelman’s recommendation is clear: Forget 1%, 3%, or 5%—allocating up to 40% in Bitcoin might be the future of portfolio strategy.
