It looks like bitcoin and crypto is entering mainstream territory.Bitcoin Is Moving Up the Financial LadderAccording to a new report offered by CNBC, many financial advisors are now telling their clients that it’s important to be at least somewhat invested in bitcoin and digital currencies. While clients shouldn’t necessarily go crazy and throw all their life savings into the digital space, it’s important to have at least a little bit put to the side. They’re suggesting that customers hold a minimum of one percent in bitcoin or assorted altcoins.Sunaya Tuteja – head of digital assets and distributed ledger technology (DLT) at TD Ameritrade – states that many clients are looking to get into the space, but don’t always know how. She admits that the space can be very complicated and that
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It looks like bitcoin and crypto is entering mainstream territory.
Bitcoin Is Moving Up the Financial Ladder
According to a new report offered by CNBC, many financial advisors are now telling their clients that it’s important to be at least somewhat invested in bitcoin and digital currencies. While clients shouldn’t necessarily go crazy and throw all their life savings into the digital space, it’s important to have at least a little bit put to the side. They’re suggesting that customers hold a minimum of one percent in bitcoin or assorted altcoins.
Sunaya Tuteja – head of digital assets and distributed ledger technology (DLT) at TD Ameritrade – states that many clients are looking to get into the space, but don’t always know how. She admits that the space can be very complicated and that there are often a lot of unanswered questions that come with investing in crypto.
At a recent conference in Florida, she explained:
It’s actually very hard to decouple blockchain and bitcoin… On the one end, how do we commercialize the value of DLT and blockchain to bring more innovation to traditional markets? On the other end of the spectrum: how do you tap into this nascent asset class?
One of the biggest powers of bitcoin is that it’s not vulnerable to inflation given that there’s a finite amount of the cryptocurrency available. According to Ric Edelman – founder of Edelman Financial Engines:
Because there’s a fixed number of bitcoins, it’s inflation-proof and its virtually instantaneous.
Edelman is the person who suggests holding one percent of bitcoin. While he acknowledges that bitcoin is not a main staple of any retirement account anywhere, he does suggest that blockchain technology is making its way deeper into legitimate territory, and it’s likely to play a large role in investors’ lives in the future.
He comments:
We need to acknowledge that one percent allocation isn’t going to materially harm a client. It isn’t going to prevent them from achieving their financial goals, and it won’t damage their personal finances.
As it stands, he suggests most people keep about 60 percent of their portfolios invested in traditional stocks. It used to be that the other 40 percent should go to bonds, but now he’s suggesting 39 percent for bonds and one percent for crypto. Given that digital currency is volatile, the number should be kept small, but this will get people used to the idea that blockchain has a place in their financial futures.
Don’t Go Crazy; Be Smart About It
He also states that clients should read more and properly educate themselves on crypto and blockchain before making any serious moves. Otherwise, they’re in for a world of trouble down the line. He explains:
Don’t consider investing unless you understand the technology. Otherwise, you’re not investing; you are spending.