Navigating Cryptocurrency in Portfolio Allocation

Ric Edelman, founder of Edelman Financial Engines, and Matthew Kolesky, president at Arbor Capital, discuss the state of Bitcoin adoption amongst financial advisors, who control $5 trillion in investor wealth. In this episode, they talk about:

• their background and why they got into crypto (1:25)
• how most RIAs (registered investment advisors) view digital assets and the hassle of buying crypto on a client’s behalf (8:59)
• what percentage of financial advisors have already invested in bitcoin and how many more will come into the space by next year (18:20)
• how RIADAC -- the RIA Digital Assets Council -- is educating financial advisors about crypto (21:59)
• their favorite methods to explain Bitcoin and other digital assets (25:22)
• the different ways financial advisors are getting bitcoin/crypto exposure for their clients (35:32)
• why RIAs use investment vehicles to purchase Bitcoin rather than spot-buying the actual asset (39:58)
• why GBTC is trading at a deficit to the bitcoin price and their thoughts on a bitcoin ETF (44:40)
• the percent allocation to crypto they feel comfortable with for their clients (54:26)
• how they rebalance crypto holdings, whether they use yield-bearing crypto products yet, and projections for 2021 (57:35)

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Episode links:

Ric Edelman

• Twitter: https://twitter.com/ricedelman?ref_src=twsrc%5Egoogle%7Ctwcamp%5Eserp%7Ctwgr%5Eauthor
• RIADAC: https://riadac.com/

Matt Kolesky

• Twitter: https://twitter.com/mkolesky 
• Arbor Capital: https://www.acminc.com/ + https://digital.arbor.capital/ 

Helpful Links:

• Bitwise ETF Trends + Survey of Financial Advisors
  • https://static.bitwiseinvestments.com/Research/Bitwise-2021-Benchmark-Survey-Financial-Advisor-Attitudes-Toward-Cryptoassets.pdf
• Fidelity’s Bitcoin Investment Thesis
  • https://www.fidelitydigitalassets.com/bin-public/060_www_fidelity_com/documents/FDAS/bitcoin-alternative-investment.pdf 
• RIADAC’s 12 Predictions for 2021
  • https://www.thinkadvisor.com/2021/01/07/ric-edelman-12-predictions-for-bitcoin-other-cryptos-in-2021/
• RIADAC 1% Allocation strategy
  • https://riadac.com/digital-assets-are-now-mainstream/its-still-early-with-tremendous-upside-potential/
• Arbor Capital’s “True Digital Asset SMA”
  • https://www.prnewswire.com/news-releases/arbor-digital-and-blockchange-partner-on-digital-asset-sma-for-registered-investment-advisors-301219459.html 
• Grayscale BTC Premium Flips Negative
  • https://www.coindesk.com/grayscale-negative-premium-bitcoin
• Blockchange
  • https://blockchange.ai/

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