Why this expert thinks Bitcoin can reach $420,000

The Street

Ric Edelman, Founder of The Digital Assets Council Of Financial Professionals, joins TheStreet to explain why he’s so high on Bitcoin.

Transcript

00:00Where do you see Bitcoin headed in 2025?

00:04I see it going higher.

00:06I'm on record as suggesting that by the end of the decade, Bitcoin will be $420,000.

00:13I believe Bitcoin is going to rise eightfold over the next six years, far outpacing the

00:19performance of any other asset class.

00:21So I'm a strong believer that you should have a 1% or 2% or 3% allocation in your portfolio

00:28to Bitcoin and Ethereum, because I think it's a good diversification tool and you have a

00:34very high potential for outperforming the markets.

00:38And if it doesn't go well, it's only 1% or 2%, it's not going to cause you irreparable

00:43financial damage.

00:45So I think too many people don't know enough about this, and they are missing the opportunity

00:50that is available.

00:53I'm going to get back to the portfolio percentage in a minute, but I can't just let you go with

00:57giving us a big number like that, $420,000 for Bitcoin.

01:00How do we get there?

01:02What is the catalyst to move Bitcoin prices from where they are now to your target?

01:09Well, take a look at the world's total wealth.

01:12If you add up the total value of all the money in the world, the total value of stocks and

01:18bonds and real estate and gold and oil, etc.

01:21It all adds up $7.5 or $70, $80 trillion of value.

01:28We are recommending roughly 1%, 2% of assets in crypto.

01:33If everybody in the world who owned all those assets were to allocate just 1% of their portfolio

01:39to crypto, we'd be talking about a $7 trillion infusion of capital into the asset class.

01:47We know there's only 21 million Bitcoins that will ever be created, 19 million of them

01:53so far already have.

01:55So you do the simple arithmetic, 19 million Bitcoins into 7.5 trillion of asset flows,

02:03that translates to about $420,000 per Bitcoin.

02:06So we believe that over the next five years, we're going to see greater institutional engagement.

02:12You're going to see endowments, pension funds, sovereign wealth funds, family offices, hedge

02:17funds, engaging in asset allocation, including crypto in their portfolios.

02:23We're already beginning to see this, half a billion people worldwide already own crypto.

02:29We're seeing pension funds and endowments already engaged now that the Bitcoin ETFs

02:35and Ethereum ETFs are available in the marketplace here in the US.

02:38So as this adoption grows, since the supply is fixed, the increased demand will translate

02:45into a radically higher stock price or price for Bitcoin.

02:49So you mentioned the rise in the price of Bitcoin, but man, when the price drops, it

02:54really does drop.

02:56So what's your sales pitch to clients?

02:58Crypto, of course, is a shiny new thing, but the volatility on that thing is through the roof.

03:03That volatility might be too much for most investors.

03:07You're absolutely right.

03:09This is an extraordinarily volatile asset.

03:12Ten times it has lost 70% or more of its value.

03:16So it is ridiculously volatile.

03:18This is the way it is for any new technology.

03:21Go back to Amazon.

03:22Look at its first 15 years of life.

03:24It had the same level of volatility.

03:27This is not uncommon within the tech stock world.

03:30So you need to recognize that fact.

03:32You need to decide, as you just pointed out, do you have the stomach for that volatility?

03:35Is this something you want to have as part of your portfolio?

03:38If you can handle the volatility, if you can be a long-term investor, realizing that

03:43in the end, high volatility can translate to high profit while also running the risk

03:48of high loss, that'll help you decide whether or not you should do this.

03:53And it's a big part of the reason I recommend only 1% or 2% or 3%.

03:57Don't put 10% or 20% or 30% of your money in this.

04:00It's way too volatile and too risky.

04:02But 1% or 2%, I think most people can tolerate that.

04:08Thanks for watching.

04:09Don't forget to like and subscribe.

04:10And I'll see you in the next video.

04:11Take care.

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