The SEC is accelerating its approval process, and funds continue to flow into ETFs. Is Bitcoin expected to reach new highs?

U.S. stocks on Tuesday (7/1) showed mixed performance, continuing to hover near historical highs. Fed Chair Powell, who had been heavily criticized by Trump, finally responded directly, stating that the Fed would have already cut rates if not for tariffs! The spot BTC ETF has seen net inflows for 15 consecutive days, and the SEC is accelerating the approval of crypto ETFs. Could this give Bitcoin, which is hovering near historical highs, a chance to reach new peaks? The number of job openings in the U.S. in May reached a new high since November, mainly driven by the leisure and hospitality industries, with layoffs also declining. Fed policymakers have consistently described the labor market conditions in recent weeks as strong. The U.S. government will release the June employment report on Thursday, expected to show a slowdown in non-farm employment growth and an increase in the unemployment rate. Fed Chair Powell, who had been heavily criticized by Trump, attended a forum hosted by the European Central Bank in Sintra, Portugal on Tuesday. Powell directly addressed the criticism, stating that the Fed would have already cut rates if not for Trump's expanded use of tariffs. However, he did not rule out the possibility of a rate cut in late July, saying the Fed will continue to make decisions based on data. According to the CME FedWatch index, traders generally expect the Fed to cut rates again in mid-September, with potential additional cuts in October and December, which differs from the previous expectation of two cuts before the end of the year. With Bitcoin's price less than 5% away from its historical high, the U.S. spot BTC ETF has seen net inflows for 15 consecutive days, totaling $4.7 billion. ETF Store President Nate Geraci stated: "New funds are approaching $5 billion. Not $5 billion in a year, but $5 billion in the past 15 trading days." Previously, many experts believed the maximum amount for the U.S. spot Bitcoin ETF in the first year would be $5 billion. The SEC has recently accelerated the approval of crypto ETFs. After approving the first staking SOL ETF "REX-Osprey Solana and Staking ETF", they also approved Grayscale's Digital Large Cap Fund LLC, which invests in BTC, ETH, Solana, Cardano, and XRP, potentially signaling a positive momentum for future crypto fund proposals. Wall Street wealth management advisor and New York Times bestselling author of "The Truth About Crypto" Ric Edelman recently published a research report advocating for investors to significantly increase their allocation to crypto assets. According to his recommendation, conservative investors should allocate at least 10%, while moderate and aggressive investors should allocate 25% to 40%. Ric Edelman's Edelman Financial Engines currently manages assets worth $287 billion. This information comes from the Forward Guidance newsletter and is a market observation, not investment advice.

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Traditional Allocation is Outdated, Crypto is the Core Asset of Wealth

Edelman believes that the traditional 60/40 stock and bond asset allocation method can no longer meet today's financial challenges. Against the backdrop of extended human lifespan, asset allocation should enter a new stage. According to Edelman's research report, crypto is no longer a speculative tool, but an asset class with long-term investment value.

He points out that market-weighted portfolios should include crypto assets, and not allocating crypto is essentially shorting the entire market. Moreover, portfolios including Bitcoin have repeatedly outperformed traditional asset portfolios in risk-adjusted returns, whether viewed from Sharpe ratio, Sortino ratio, standard deviation, or maximum drawdown.

Financial Advisors Need to Focus on Clients' Crypto Asset Allocation

Edelman notes in the report that financial advisors who cannot recognize the role of crypto assets in modern portfolios will fail to effectively serve their clients. Bloomberg analyst Eric Balchunas stated on platform X that Edelman's statement is the most significant support for crypto from traditional finance since BlackRock CEO Larry Fink.

From 1% to 40%: Attitude Change Reflects Market Trends

Looking back at Edelman's past stance, in his 2021 book The Truth About Crypto, he recommended a crypto asset allocation of only 1%. Now he suggests raising the allocation significantly to 40%, showing massive changes in market environment and industry confidence.

In his view, today's 40% crypto asset allocation is actually lower risk than the 1% allocation four years ago. Edelman believes the current policy environment is clearer, with the US government not only no longer hostile to crypto, but even providing support in institutional and regulatory aspects. Banks and brokers can now legally trade and custody, making it easier for investment advisors to access this field.

Traditional Investment Advisors Will Ultimately Shift Completely

Edelman analyzes that investors currently have three attitudes towards crypto assets: first, curious but not yet established; second, skeptical; third, completely opposed. He points out that some people resist crypto due to political positions (such as opposing MAGA) or lack of modern portfolio theory knowledge, but by focusing on business development, most will reconsider their stance.

He added that crypto assets can help advisors attract more clients, increase AUM and referrals, which is the most convincing evidence. He believes that although institutions like Vanguard currently remain reserved about crypto, they will ultimately shift.

High Investment Target Flexibility, Advisors Can Decide Direction Independently

Regarding which types of crypto assets investors should allocate, Edelman did not provide a clear direction. He states that advisors or investors can decide based on their risk preferences, possibly choosing a single asset like Bitcoin or combining multiple crypto tokens, related stocks, or even ETFs.

Continuous Market Capital Inflow, Crypto Assets Momentum Strong

According to CoinShares data, from June 23 to 27, digital asset investment products saw a net inflow of $2.7 billion, marking 11 consecutive weeks of positive inflow. Among these, Bitcoin and related products attracted $2.2 billion, while Ethereum products received $429 million in inflows.

In the stock market, crypto-related companies are also attracting attention. Circle's recent IPO was hotly pursued, with stock prices currently around $180 per share. Coinbase (COIN), MicroStrategy (MSTR), and Robinhood (HOOD) have risen 37%, 34%, and 134% year-to-date respectively. On Monday, HOOD's stock rose 11% after announcing tokenized stock business news. Additionally, crypto exchange Kraken has officially launched its tokenized stock and ETF platform, targeting non-US investors.

New Era of Traditional Finance Integrating Crypto Arrives

Edelman's latest perspective not only reflects his high confidence in crypto asset prospects but also demonstrates the traditional financial sector's changing attitude towards crypto assets. From "crypto marginalism" to "mainstream asset allocation", investment and financial planning have officially entered a structural transformation.