Edelman said with blockchain technology, the information is open to everybody all around the world. “The data is immutable. Once the data is on the blockchain, it can never be changed. Most importantly, blockchain technology eliminates the trust industry and creates the authentication industry,” he said.
Bitcoin, which Edelman said was created 12 years ago, has thousands of commercial applications available in every sector of global commerce. It’s inflation-free, instantaneous, secure and free, he said.
One of the powerful ways in which it is used is as cross-border payments, moving money from one country to the other, which Edelman noted is a $4 trillion industry. He said individuals, mostly immigrants, who send money back home to their families, account for 20% or $800 billion of that. “It can be done in 10 minutes virtually for free.”
Edelman noted that millions of merchants accept bitcoin payments, and it you can used to make charitable donations, political contributions, pay state fees and even college tuition. “That’s why this ain’t a fad anymore,” he said.
Edelman said 300 million people around the world, including 24% of U.S. adults, are buying bitcoin, and two-thirds of U.S. adults describe themselves as crypto-curious. “More U.S. adults are more familiar with digital assets than ETFs by a score 39% to 32%. That’s amazing to me,” he said.
Edelman went on to note that 300 million users on PayPal can buy bitcoin and use it to purchase goods and services around the world and Walmart is installing bitcoin ATMs nationwide. He said among those buying digital assets are millionaires, major corporations, university endowments and pension funds. “Thirty percent of hedge funds are going to be invested over the next two years and three out of four family offices are engaged in crypto,” he added.
He further noted that Coinbase, which operates a cryptocurrency exchange platform, is the top free download app in the Apple store. In fact, he said, they now have more account holders than Charles Schwab, where bitcoin is among the top five holdings of millennials. “Your clients and your clients’ kids own bitcoin, they just haven’t told you about it,” he said.
Bitcoin, Edelman explained, operates unlike any other asset class. “It’s just different. You can’t use your asset allocation experience and expertise and apply it to the digital assets marketplace,” he said, adding that “a one percent allocation can materially improve the portfolio, but if it blows it up, it’s not going to harm the client.”
Edelman said while there is a huge amount to learn about digital assets, it is easy for advisors to become involved. He said advisors can add this asset class just like they would add exponential technologies or ESG or emerging markets, and it can be added in a “totally compliant way simply and easily without disruption to your practice management,” he said.
“It’s time for you to get off zero so you can properly give your client an additional diversification that you love to provide for them,” he said.