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How to start investing in crypto: strategist
Ric Edelman, founder of the Digital Assets Council of Financial Professionals, joins Wealth! to explain how new investors should enter the cryptocurrency market.
He sees Bitcoin ETFs as a great place to start: “They’re like any other ETF, that everyone knows about. Buy them in a regular brokerage account. They’re incredibly cheap.” He warns that Bitcoin (BTC-USD) is still very volatile, so investors should “stay focused on the long term, not overinvest and not invest for the wrong reasons.”
Edelman explains that more cryptocurrency ETFs will come to market, such as Ethereum (ETH-USD) currently has several pending requests. “I don’t know how quickly you’ll see anything else after this, but [bitcoin and ethereum] will open the doors in the long term. In five years, there will be dozens, if not hundreds, of crypto ETFs,” he adds.
For more expert insights and the latest market action, click here to watch this full episode of Wealth!
This article was written by Mélanie Riehl
Video transcription
Well, if you are curious to get into the crypto market but still wary of the volatility and security concerns of owning digital assets.
Our next guest suggests that the Bitcoin ETF S spot might be the right path for you.
We now welcome Rick Edelman, founder of the Digital Assets Council of Financial Professionals and bestselling author of Truth about crypto.
Welcome Rick.
Nice to see you in person.
You are too good to be with today.
Absolutely.
So let’s break this down a little more here.
Some of the pros and cons of investing in Spot Bitcoin ETF.
So let’s start with the pros.
Of course.
Many people have been very interested in this curiosity, but it has been tedious and difficult to purchase it.
But now these S ETFs are available and they are just like any other ETF that everyone is used to buying in a regular brokerage account.
They are incredibly cheap, 2025 basis points cheaper than Coinbase or another crypto exchange and being in a brokerage account you can rebalance, you can dollar cost average, you can tax losses, Harvard.
It’s simple, easy to manage, like any other unprecedented asset class.
And that makes it more accessible than ever to everyone.
So what about the downsides here?
Well, the downsides are that it’s still Bitcoin, which means it’s still very volatile, it’s still very risky.
You could still lose everything.
We face regulatory uncertainty.
Um, there are still lawsuits, there is still a lot of fraud.
So you have to be very careful and a lot of people get into it because of FOMO, you know, they’re afraid that, you know, all my friends will do it.
The story continues
So I really need that too.
And that’s a terrible reason to invest.
So keep your head to yourself.
Stay long term.
Don’t invest too much and don’t invest for the wrong reasons.
This is the message to the child.
It’s just a cryptocurrency.
I mean, that really encompasses a large market cap for global coin market cap, but there could be other spot ETFs for other cryptocurrencies.
What are the expectations there, there are pending applications for Ethereum and the SEC is expected to reject these applications later this month.
But by the end of the year they could very well say yes after having the Bitcoin ETF S and the Ethereum ETF S, I don’t know how quickly you’ll see anything else after that, but those two s will somehow open. long-term doors.
In five years, there will be dozens, if not hundreds, of crypto ETFs.
What are the most realistic price targets?
I mean, what you’re hearing for Bitcoin, I mean, we’ve seen ranges from $150,000 by the end of next year to a million dollars.
Michael Saylor says 5 million.
So you are right.
It’s all over the map.
But what I’ve never seen is how they arrive at these numbers.
So I did the basic math myself to try to understand this arithmetic that could get us there.
It’s remarkably simple.
If you look at global assets, the value of the stock market, the bond market, the real estate market, the gold market, you look at all the assets that everyone owns, that’s about $740 trillion. .
This is world wealth.
If everyone who owns these assets simply allocated 1% to Bitcoin, that would represent a market cap of $7.4 trillion, or $420,000 per Bitcoin.
This is seven times more than the current price.
So just simple arithmetic.
Now, of course, everyone is going to put 1% into it.
Who knows?
This is the answer you must determine for yourself.
But in theory, it’s easy to see how Bitcoin could grow by five X 10 X from its current price.
We used to see price action based on the use case of cryptocurrency and Bitcoin, it seems like it varied more depending on how much in production we were, we’re going to cap anyway to 21 million.
And so, in the end, it looks more like gold than just printing money on it.
You are quite right.
The Bitcoin use case.
Although this is a strong argument for transmission, it is not the strongest argument.
It is now like gold, a store of value.
We have Ethereum and Solana and Polygon and Al Goran.
We have other parts for commercial purposes.
Bitcoin is increasingly seen as a store of value like gold, like works of art and collectibles.
And it’s generating a lot of interest, so much so that institutional investors are increasingly adding it to their portfolios.
Rick Edelman, founder of the Digital Assets Council of Financial Professionals and bestselling author of The Truth About Crypto.
Thank you so much for joining us in the studio.
My pleasure.