This has been a question I’ve seen batted about for some time now and thought it might be a good idea to share some of the ideas about an allocation of your assets to this market sector. As always I’m not giving you financial advice, but this is what some of the smartest money managers in the world are telling their clients.
You may have heard some numbers tossed around the interweb and various platforms available. But first a little basic information for the sake of clarity. A bitcoin can be broken down into 100,000,000 parts. These individual parts are called Satoshi’s or “Sats” for short. So 0.00000001 BTC is one Satoshi. And you can buy any amount you’d like from a few Sats to a few BTC. That’s up to you. I was talking with my handyman the other day and he said a buddy of his traded a guy a 12 pack of beer for 200 bitcoin a number of years ago. Even at today depressed price of $29,600 that’s $5,920,000 or $493,333 per beer. Yikes!!! I hope he really enjoyed those cold ones!!
If you want to be in the infamous 1% then you’ll need somewhere between .28 and 1 BTC. A lot of people are striving to be in the “hole coiner” club. That term simply means you own one whole bitcoin. Where ever you fall in the spectrum of the BTC hodler know that even now you’re not too late to the party. There’s still time to start “stacking sats” as they say and begin the journey.
As for the asset allocation numbers here’s some of the top 10 asset management firms in the worlds positions:
1. Blackrock 2% as of December 2021 $9.464 Trillion AUM
2. Vanguard 0% as of September 2021 $8.4 Trillion AUM
3. UBS 0% As of May 2022 $4.432 Trillion AUM
4. Fidelity 1-5% Max 20% in single 401k $4.230 Trillion AUM
5. JP Morgan 1% as of February 2021 $2.996 Trillion AUM
This just gives you a little snapshot of what these asset management firms were and are saying about allocation to the space. But what about individual investors and people you may know and respect? What are they doing?
1. Elon Musk We can’t be sure about Elon’s personal holdings but we do know that back in February 2021 Tesla (the only publicly traded Elon company) reveled that it holds $1.5 billion in BTC. Elon also said that SpaceX holds BTC and he holds only 3 cryptos personally. Bitcoin, Ethereum and Dogecoin. But BTC by far was his largest holding.
2. Ray Dalio Bridgewater Associates founder said recently that “It’s reasonable for every investor to hold a small amount of Bitcoin.” When pressed he also agreed that a 1%-2% allocation was about right.
3. Peter Thiel The co-founder of PayPal also holds Bitcoin but has not disclosed publicly exactly how much. Speaking at a conference recently in Miami only hours after BTC had hit $66,000, an all-time high at that moment, he said “I feel like I’ve underinvested in it.”
4. Warren Buffett Of Berkshire Hathaway fame has never been a fan of crypto and had made the famous comment that “It’s rat poison”. At the most recent Berkshire Hathaway annual meeting when asked about Bitcoin again the Oracle of Omaha said “If someone magically offered me all the Bitcoin in the world for $25 I wouldn’t take it.” Pssst Warren, I’ll give you $100 for it. That’s a 4X in one day. Pretty good by your standards…
5. Raoul Pal Former Goldman Sachs hedge fund manager and the founder and CEO of Real Vision and Bitcoin bull now says he only owns 1 Bitcoin. It’s unclear if that was just an off handed statement or if it actually reflects his holdings. But he has openly stated that he’s much more heavily invested in Ethereum than he is in BTC currently.
6. Bonus: Chamath Palihapitiya An early Facebook Senior VP and founder of Social Capital a silicon valley venture capital and private equity investment firm. Has held Bitcoin since 2011-13 when it was trading between $13 and $1200 per coin. At a Bitcoin conference in 2011 he said he held 100,000 BTC he’d purchased at a price under $100. Then in 2013 he told TechCrunch that he’d purchase an additional $10-$15 million more in addition to the $5 million he already held. He refers to it as “schmuck insurance” to “hedge against the traditional financial infrastructure.” Speaking as a “schmuck” myself, I’d say he did pretty good.
These are some of the smartest money guys in the game and they, for the most part they seem to understand that the landscape is changing. Even if we’re in for a little chop in the immediate short term and perhaps for the next 6-12 months. I still see this as an absolutely great play for the long term.
This weeks share is a little clip of a traditional finance guy and in an interview with Anthony Pompliano. Ric Edelman has been around for years and also has a new book out on the topic of crypto.
Here’s a link to the new book if you’re interested, no referral code just a link.
And here’s the link to the Pomp clip.
Enjoy, and as always please share this newsletter with anyone you think might benefit from the information. Have a great weekend!!
Tom