Green Giants

How renewables are reshaping the world of energy investing

Ric Edelman: It's Thursday, February 29th. Happy Leap Day. On today's program we've got bitcoin at an all-time high, plus green energy. Well, I don't know if you've been missing this news or not. I don't see how you could. Bitcoin has achieved an all-time high, beating its previous record set all the way back in 2021. I've been trying to educate you about Bitcoin blockchain digital assets broadly for years and years on this program. I first got involved in Bitcoin back in 2012 and began recommending bitcoin in 2014, when it was about $400 in price.  

Today, it has hit $63,000 in price. It is continuing to fluctuate as bitcoin notoriously does. What is taking you so long? Only 20% of us adults. I put that in quotes. Only 20% of US adults own bitcoin. That's 52 million people, 400 million around the world, the numbers are growing rapidly. And I put it to you what's taking you so long to get engaged? The old school objections are quickly fading away… Bitcoin is cumbersome. It's complicated. It's awkward. It's new. There are fears of cyber risk. There are worries of regulatory uncertainty. We're not sure if technologically it's going to survive. We don't know if it's easy to get. We don't know how to go about doing it.  

All those objections are dissipating because on January 10th of this year, a month and a half ago, bitcoin ETFs came onto the market. The SEC approved, as we've talked often here on this show, ten spot bitcoin ETFs. And these ETFs have proven to be collectively the most successful ETF launch in history. Billions and billions of dollars. I think we're now pushing $20 billion that have been deposited into these ETFs in just a few short weeks as investors realize that ETFs, being the most popular investment vehicle in the country because they're low cost, they're highly affordable. They're very liquid, totally transparent, with terrific tax efficiency.  

These ETFs are just like all other ETFs, easy to obtain in any brokerage account. You can add them to a diversified portfolio. It makes it easy to do rebalancing, dollar cost-averaging, tax-loss harvesting. Simple and easy to do to add bitcoin ETFs just like you do stock ETFs and bond ETFs and gold ETFs and real estate ETFs and foreign ETFs.  

Now we have bitcoin ETFs. Simple, easy to do. And this is why we're seeing so much money flood into the market. None of this is a surprise. If you've been listening to this podcast for any length of time you know that I've been predicting that this is exactly what we were going to see, because all the survey research we've done, all the conversations we've had with financial advisors for years, has all been telling us the very same thing. Advisors say they've wanted to allocate client assets to crypto, but have been unable to because there has not been an ETF available. The ETFs are now here, and three-quarters of advisors have consistently said that when those ETFs become available, they will allocate client assets to them on average a 2.5% allocation. Well, think about it. Independent financial advisors alone manage over $8 trillion in client assets. If three-quarters of those advisors place, on average, 2.5% of assets into client portfolios of bitcoin, we're talking asset flows of $150 billion.  

That doesn't count the institutions, endowments, pension funds and sovereign wealth funds. It doesn't count family offices. It doesn't include institutional investors like company treasuries. It doesn't include wirehouses and mainstream brokers or banks and insurance companies. Just the independent financial advisors alone is $150 billion of flows. We've seen $20 billion so far. And it doesn't even include retail investors themselves working independently without an advisor. This is why we're seeing massive flows into these bitcoin ETFs. And since there's a fixed supply of bitcoin the increased demand is translating into an increased price.  

We think this is just the beginning. I've been on record of not only predicting that we're going to see $150 billion flow from just advisors alone over the next two years. I'm also predicting that by the end of 2025, less than two years from now, bitcoin's price will be $150,000. It's currently around 60 grand. What are you waiting for?  

And to help you figure all this out, how do these ETFs work? Which ones should you buy? I've created a new bitcoin toolkit. These toolkits I have one for financial advisors and another one for investors and consumers. These toolkits are available to you for free. Cool little grid. One page gives you a comparison of all of these ETFs, showing you all the details, how they differ, why you should emphasize one over another, plus a lot of other content helping you understand what these are, how they work, how they fit into a diversified portfolio.  

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For the first time ever, the amount of money that's being invested into green energy is more than the amount being invested into oil and gas. And by a big margin, $1.7 trillion invested in clean technologies versus $1 trillion for fossil fuels. And of all the green energies, wind, water, geothermal, volcanic, one of these green energies stands out; solar. The sun produces 10,000 times more energy than we actually use. All we've got to do is figure out how to grab it, store it, and transmit it. And we've got to do those three things economically. So investments this year into solar power are going to hit $400 billion compared to oil, that's only getting $370 billion.  

But solar isn't the only bet being made. There's a lot of deep-sea mining going on now as well. They're looking for cobalt, nickel and copper. These metals are needed to make batteries, and batteries are what's needed for electric vehicles. All the big countries, the US of course, as well as Britain, France, Norway, you name it, are forcing car makers to shift to electric vehicles. That means we're going to need a lot of batteries, and that means we're going to need a lot of components that go into those batteries cobalt, nickel, copper, lithium.  

So they're now looking in the bottom of the ocean. And yeah, there's likely going to be impact on the surrounding ecosystem in the sea, just like there is when we mine the stuff on land. But scientists say that there's less life down there and the footprint of the operations are smaller. So the result on a relative basis, I suppose, the damage from sea mining is less than mining on the surface. Or maybe that's just rationale. I'll let you decide.  

Meanwhile, the race is on to replace fossil fuels. That means you ought to consider the idea of green energy as part of a diversified portfolio.  

You know, for years my wife Jean has said that personal finance is more personal than finance, and that's why Jean has her own weekly podcast, Self-Care with Jean Edelman. Every week, Jean helps us reflect on how we're living our lives, and she tells us how we can see people and the world around us in a more positive, caring way. From life's simple issues to our bigger questions, Jean helps us find quiet and balance by turning inward. By looking at how we live our lives, we can discover the lessons that help us cope with our daily challenges. Jean's latest episode comes out every Thursday, so you can listen today.  

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