We hope everyone’s having a good Monday! Permissionless week is over, but there’re plenty of non-conference updates to address. 

Ben chatted with an RIA founder about his modified crypto allocation advice. Casey details what economic data to be watching ahead of Independence Day. Let’s get on with it.

10-40% crypto allocation?

We were a bit busy with Permissionless last week, but I wanted to address the latest crypto allocation thinking from a well-known financial planning firm founder.

Ric Edelman started in the 1980s what is now called Edelman Financial Engines — a registered investment adviser that had $287 billion assets under management at the end of Q1. He’s now recommending a 10% allocation to crypto for conservative investors. 

That should go up to 25% and 40% for those with moderate or aggressive risk appetites, respectively, he advised in a report earlier this month. An excerpt is below: 

Bloomberg Intelligence analyst Eric Balchunas labeled Edelman “Mr. RIA” in an X post — calling his statement “arguably the most important full throated endorsement of crypto from TradFi world since Larry Fink.”

It’s worth noting that Edelman has been bullish on crypto for years, creating the Digital Assets Council of Financial Professionals in 2018. He said this month he expects BTC to hit $500,000 by 2030. 

Still, it’s a dramatic increase from when Edelman, in his 2021 book The Truth About Crypto, recommended a 1% allocation. We had heard of adviser allocations to bitcoin ETFs ranging from 1% to 10%, and BlackRock in February started allocating 1-2% of the assets in its alternatives-focused model portfolios to its IBIT offering.

Unlike four years ago, there’s no risk the US government could ban crypto (and it actually supports the space), Edelman told me. Bank and brokerage firms can also now trade and custody crypto, allowing the adviser community to participate. Crypto has survived scandals and institutional engagement has begun, he added.

“A 40% allocation today is actually safer than a 1% allocation was four years ago,” Edelman said.

The financial pro has lots of chats with advisers, senior firm management and individual investors. 

“Some are crypto-curious with no established view,” Edelman explained. “Others are skeptics, and some are downright hostile.”

As he put it, there are those who stubbornly resist (i.e. anti-MAGA folks who frame crypto in a political way, or those who don’t understand modern portfolio theory). But much of the “hostile” group can be converted by simply shifting their focus away from crypto and toward their business.

“Demonstrating that crypto can help them attract more clients, AUM and referrals is powerful commentary,” Edelman noted. (He has told me he expects crypto skeptic/fund giant Vanguard to ultimately reverse its anti-crypto policy position too.)

When following up with Edelman on his latest allocation advice, I wanted to clarify what type of crypto exposure he was referring to. He leaves that to the adviser or investor, he said, as preferences range (BTC only, a mix of several tokens, crypto-linked equities, etc.).   

Digital asset investment products notched net inflows of $2.7 billion from June 23-27, CoinShares data shows — marking an 11th straight inflow week for the segment. While the bulk of that capital flowed into bitcoin products ($2.2 billion), $429 million went to ether offerings.   

On the crypto stock front, Circle’s IPO earlier this month clearly piqued both institutional and retail interest (its stock price was ~$180 this afternoon. There’s Coinbase, Strategy and Robinhood too, of course — with COIN, MSTR and HOOD having seen year-to-date gains around 37%, 34% and 134%, respectively. 

HOOD stock was up 11% on Monday, as of 1:30 pm ET, after sharing some tokenized stock news (keep scrolling for more).

A related update: Kraken, which signaled it would soon offer tokenized US stocks and ETFs to non-US investors, went live with that today.

If you missed my Permissionless/tokenization piece from Friday, here you go. Until next time. 

— Ben Strack

This is how many tokenized US stocks and ETFs Robinhood’s European Union-based users will be able to trade (24 hours a day, five days a week), the company revealed this morning.

Robinhood is set to hold shares of the companies to back the tokenized assets. Investment app leaders said owners will have access to dividends but not voting rights (at least for now). 

Happy Monday! It’s a short week for our US readers, but a busy one for economic data nonetheless. The labor market will be in full focus this week with some key reports set to drop. Markets are still pricing in an 80% likelihood that committee members hold interest rates in July, according to CME Group data. 

The US stock market will be closed on July 4. Here’s what we’re watching in the meantime: 

• May’s JOLTS report comes out Tuesday. Analysts expect the print to show 7.3 million job openings (compared to 7.4 million in April). Fed Chair Jerome Powell is scheduled to speak Tuesday morning ahead of the release. Markets will once again be listening for hints about when the central bank may start lowering interest rates. 

• The ADP employment report for June will be released Wednesday. After May’s massive miss (37,000 actual vs. 111,000 expected), analysts are more optimistic this time around, calling for 120,000 private sector jobs added in June. 

• To close out jobs week, the June employment report and initial jobless claims both come on Thursday. The employment report is projected to show 115,000 jobs added, and unemployment for the 12 months ended June is expected to be 4.3% (compared to 4.2% in May).

— Casey Wagner