Top Wall Street Advisor: Every Firm Should Consider Investing in Bitcoin

Ric Edelman, a top Wall Street advisor and the chairman of Edelman Financial Services, LLC, said in an interview with CNBC's Fast Money that every financial advisor and investment firm should consider allocating capital to Bitcoin.

Within a relatively short period of time, the valuation of Bitcoin went from zero to $112 billion, enabling a market that is valued at $216 billion with a daily trading volume of $13 billion.

In its research, Tabb Group discovered that the over-the-counter market records around two to three-fold larger daily trading volume in comparison to the cryptocurrency exchange market.

Given the improvement of market infrastructure, the liquidity of cryptocurrencies, and the acknowledgment of digital assets as an emerging asset class, Edelman firmly stated that every investor should invest in Bitcoin.

"I'm bullish on it because Bitcoin is now ten years old, it is a $200 billion market and Bitcoin is about 40 percent of that. Clearly, it is here to stay. There is a massive amount of investment going into the blockchain and crypto assets, and financial advisors really don't know much about it, no more than their clients do."

Edelman echoed the sentiment of Yale economist Aleh Tsyvinski, a macroeconomics professor at the prestigious Yale University, who stated that any investor that even slightly believes Bitcoin will demonstrate a similar price movement it recorded in previous years should invest 1 to 6 percent of a portfolio in the dominant cryptocurrency.

"If you as an investor believe that Bitcoin will perform as well as it has historically, then you should hold 6% of your portfolio in Bitcoin. If you believe that it will do half as well, you should hold 4%. In all other circumstances, if you think it will do much worse, then you should still hold 1%.".

Despite the rapid growth of the market in terms of volume, infrastructure, user base, awareness, and adoption, he explained that there is "Virtually no federal regulation" in the space, which has led investors to be reluctant towards acknowledging the cryptocurrency market as a legitimate industry.

For retail traders or individual investors, apart from cryptocurrency exchanges, which require specific know-how and knowledge as SEC Commissioner Hester Peirce said, there isn't a practical and secure way of investing in the market.

Once the US Securities and Exchange Commission approves the first Bitcoin exchange-traded fund, Edelman said that the cryptocurrency market will see an unprecedented influx of capital from the traditional finance sector.