Investing 60% in stocks and 40% in bonds is dead, the future is bitcoin: Jack Mallers

Jack Mallers, CEO of Strike, says that the traditional investment model based on 60% stocks and 40% bonds is obsolete. In his opinion, these assets – along with the real estate market – have not only lost profitability, but are “destroying American cities” due to their poor performance.

In a recent post, Mallers highlighted that the opening of 401(k) retirement plans to bitcoin (BTC) and gold, coupled with Harvard’s decision to acquire the asset, are clear signs that “the 60/40 portfolio is dead.” His verdict was blunt: “Long live hard money. Long live bitcoin.”

Part of their optimism toward BTC is supported by Donald Trump’s recent executive order, which seeks to expand access to “alternative assets” in 401(k) retirement plans — employer-sponsored retirement savings accounts in the U.S. — and other defined contribution schemes. This measure, aimed at democratizing investments outside traditional markets, includes cryptocurrencies.

For Mallers, this opening offers millions of Americans the possibility of accessing bitcoin as an alternative to preserve and grow their capital in the long term.

In addition, the case of Harvard stands out. According to data filed with the U.S. Securities and Exchange Commission (SEC), the university reported that as of June 30 of this year, it owned about 1.9 million shares of the iShares Bitcoin ETF, valued at more than $116 million.

It is worth mentioning that bitcoin’s relevance responds mainly to its fundamental characteristic: its scarcity. Unlike stocks, bonds, or real estate, the supply of BTC is limited to 21 million units, and the production of new coins progressively decreases with halvings occurring every four years until the total supply is fully mined, which is expected by the year 2140.

For this reason, a few days ago, Mallers stressed that, given the high demand from large funds and even governments, buyers will be forced to acquire BTC at increasingly higher prices.

A problem affecting cities

In an episode of his podcast, Mallers illustrated his stance with the case of the city of Chicago, noting that the city faces an estimated $1.12 billion budget deficit by 2026.

Thus, he explained that a large part of the pensions of essential workers, such as police officers and teachers, are invested in Treasury bonds and commercial real estate. However, he warned that the sharp fall in the value of these assets has put at risk the ability to pay these pensions.

According to the young bitcoin specialist, this vicious cycle — struggling pensions that impact the city, and a troubled city that threatens pensions — shows that the 60/40 model is no longer viable. “They’re not going to survive on bonds and stocks,” he said.

The truth is that the CEO of Strike is not alone in his diagnosis. As reported by CriptoNoticias, financial advisors such as Ric Edelman have pointed out that the 60/40 model was conceived at a time with lower life expectancy and higher-yielding bonds. Today, the specialist argues, allocating 40% of the portfolio to low-yield fixed income is no longer enough to maintain capital over decades of retirement.

Edelman sees bitcoin as offering superior return potential and has a low correlation with stocks, bonds, and commodities. This makes it, in his opinion, an effective tool to improve the risk-return profile of portfolios. For that reason, it has raised its recommendations, going from a modest 1% in BTC to allocations of between 10% and 40%, depending on the investor’s profile.