in a twitter.com/thedacfp/status/1790462470051545191″ target=”_blank” rel=”nofollow”>interview With “Wealth” from Yahoo Finance, Ric Edelman, founder of the Digital Asset Council of Financial Professionals and asset manager of $291 billion Edelman Financial Services, provided a surprising forecast for the price of bitcoin. Edelman argued that the price of bitcoin could rise to $420,000, attributing this potential rise to a modest global asset allocation towards bitcoin.
Why bitcoin Price Will Hit $420,000
During the interview, Edelman delved into the advantages of investing in bitcoin Spot ETFs. He noted that these instruments make bitcoin accessible in the same way as traditional ETFs, which are common and familiar to investors using ordinary brokerage accounts.
“They're incredibly cheap, 20 to 25 basis points cheaper than, say, Coinbase or another cryptocurrency exchange, and by being in a brokerage account, you can rebalance, you can dollar-cost average, you can tax the harvest of losses,” Edelman noted. This setup simplifies the investment process, making it similar to managing any other asset class, thus broadening its appeal to a broader audience.
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However, Edelman was also candid about the challenges and risks associated with bitcoin. Despite the advantages that ETFs offer, the inherent nature of bitcoin as a volatile and risky investment remains. “It's still bitcoin, which means it's still very volatile and very risky. You could still lose everything,” he warned.
Edelman pointed to ongoing regulatory uncertainty, potential lawsuits and frequent fraud as important risks that investors should manage cautiously. He also criticized the trend of investing out of fear of missing out (FOMO), calling it a poor investment rationale.
Looking ahead, Edelman analyzed the regulatory landscape, particularly as it relates to other cryptocurrencies such as ethereum. He noted that there are several pending applications for ethereum ETFs and while he anticipates initial rejections, approvals could follow by the end of the year.
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“After having the bitcoin ETFs and the ethereum ETFs, I'm not sure how quickly we'll see anything else after that, but these two will open the doors in the long term. Within five years, there will be dozens, maybe even hundreds of crypto ETFs,” Edelman speculated. This outlook underscores a significant shift toward widespread acceptance and integration of cryptocurrencies into traditional financial products.
Edelman's prediction that bitcoin will reach $420,000 is based on an assumption of global asset diversification. According to his calculations, if all global asset holders allocated just 1% of their assets to bitcoin, this would translate into a market capitalization of $7.4 trillion for bitcoin alone.
“It's surprisingly simple. If you take a look at the global assets of the world, the value of the stock market, globally, the bond market, the real estate market, the gold market, you just look at all the assets that everyone owns, it's about 740 trillion. of dollars. ,” he explained. Such an allocation would dramatically increase bitcoin's market capitalization, significantly raising its price.
Additionally, Edelman highlighted a shift in the perception of bitcoin from a transactional currency to a store of value, similar to gold. “The bitcoin use case, while strong for streaming, is not the strongest argument. Now it is like gold, a store of value,” he stated. This change in perception has attracted more institutional investors, who view bitcoin as a hedge or alternative asset class, similar to other non-traditional investments such as works of art or collectibles.
At the time of publication, btc was trading at $61,909.
Featured image from Wealth Management, chart from TradingView.com
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