Financial advisor and founder of Edelman Financial Engines, Ric Edelman, has made a bold prediction that bitcoin will soar to $420,000 by the end of the decade. In an article published on Think Advisor, Edelman explained that if just 1% of the world’s $738 trillion in financial assets were invested in bitcoin, it would result in a staggering $7.4 trillion inflow, driving up the price of the cryptocurrency.
Edelman based his prediction on simple arithmetic and cited surveys, including those conducted by Franklin Templeton, which revealed that more than 75% of independent registered investment advisors (RIAs) plan to allocate 2.5% of their assets to bitcoin. With RIAs managing a total of $8 trillion, this translates to approximately $150 billion flowing into bitcoin. Edelman also speculated that other institutional investors, such as family offices, pension funds, and endowments, may also increase their allocations to the cryptocurrency.
What underpins Edelman’s analysis is the fact that global financial assets amount to a staggering $738 trillion. By calculating the combined values of the global equity market, debt market, real estate market, gold market, cash market, bitcoin, and other assets as of December 31, Edelman arrived at this figure. He highlighted the unique supply constraint of bitcoin, with only 21 million coins ever to exist. This scarcity, coupled with increased allocations from advisors and institutions, could lead to a significant price rise.
Edelman emphasized that if all the advisors, investors, and institutions managing these assets were to allocate just 1% of their client portfolios to bitcoin, it would result in total inflows of $7.4 trillion. With 19.4 million bitcoins already in existence, each bitcoin would increase in value by approximately $378,000. When factoring in bitcoin’s current price of around $42,000 as of December 31, Edelman concluded that the future price of bitcoin could reach approximately $420,000.
What do you think of Ric Edelman’s prediction? Do you believe bitcoin will reach $420,000 by the end of the decade? Share your thoughts in the comments section below.
