Ric Edelman, founder of the Digital Assets Council of Financial Professionals.Ric Edelman, founder of the Digital Assets Council of Financial Professionals.

There has been an "I told you so" moment as a result of the recent plunge in the price of Bitcoins.

How do you make a lot of money? At a conference for financial advisors earlier this month, a panelist made a joke about investing a billion in the digital currency.

At the same Wealth Management EDGE conference, a different message was presented by a former independent financial advisor and founder of a financial services company.

A lot of people are convinced that it is a fad or a fraud. I don't want you to fall in love with it.

He said that you need to be knowledgeable because you are getting questions from clients.

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The Digital Assets Council of Financial Professionals was founded by Edelman to educate the financial industry on the first major new asset class in 150 years.

He stepped away from his chairmanship of the company last year, though he is still its largest individual shareholder. All of his securities licenses have been removed from his name.

CNBC.com caught up with the author to find out more about his new book and what he thinks about the future of cryptocurrencies.

He told CNBC thatBitcoin will be more valuable than it is today. We haven't seen a wealth creation opportunity like that in 35 years.

The interview has been edited to make it clearer.

What is the winter for investing in digital assets?

There is a major decline in the price of digital assets. It has fallen in price by 70% or more seven times in the past.

Major declines of this degree are not unusual for emerging new technologies. You will see the same price performance of their stocks in their early years of development if you look at the first 12 years. You see massive price fluctuations along the way to producing unprecedented levels of profits as you innovate a new technology, gain market share and become mature.

It has generated a 40 million percent total return since it was first created. Since the beginning of the year, it's up 7x, even though it's down 70%. You need to be willing to tolerate this kind of incredible volatility along the way in order to be successful in innovation.

There were many people in the financial advisor community who didn't like what they saw. Tell them what you have to say.

If clients were to express that view, they would not be accepted by them. The stock market went down in six weeks. If you use that time period to argue that stocks are too risky to invest in, it is an artificial time period. To get a more legitimate conclusion, you need a longer period of time.

It's the same thing when it comes tocryptocurrencies. If you look at the last nine months, you can see that the decline in the price of bitcoins proves that it is too risky to invest in. You would have a different perspective if you had a 7x return. Confirmation bias and recency bias are what people who are using this latest decline as an argument against bitcoin are, advisors with a preconceived notion grabbing at a unique data point to prove an argument that is specious.

What are the risks if you don't invest incryptocurrencies?

A 1% asset allocation to digital assets is recommended in my new book. It is a new asset class. It faces a lot of risks as it develops and matures. There is a chance that you have regulatory risk. There is a chance of fraud and abuse. There's a risk with technology. There is always the chance of a decrease in demand. I recommend a low single digit allocation to this asset class as part of a diversified portfolio.

Dave Pope (center) works in the Digifox booth setup at the Bitcoin 2021 Convention, a cryptocurrency conference held in Miami on June 4, 2021.

If you don't do anything, you run the risk of being wrong. A very low asset allocation of 1% or 2% is sufficient to improve the overall return of the portfolio. If there is a 1% loss, it won't cause you much financial harm. It's possible that you could be wrong if you don't invest.

In the book, you point out that investing in digital assets isn't necessarily related to cryptocurrencies. You can still get exposure in other places.

Correct. You don't need to buy stock in General GM just because you're a fan. You could buy stock in companies that make asphalt, because those cars will need roads to drive on. You could invest in companies that make white paint because those roads need to be painted. You can invest in companies that make traffic lights. There are a lot of ways to invest in an industrial sector. The picks and shovels approach was made famous by Levi's, who never mined for gold during the California gold rush but instead sold blue jeans to the gold miners.

This approach can be used in a different way. The companies that are facilitating and building the technology are the ones that should be investing in. You can invest in both publicly traded and privately held mining companies. You can invest in a company that makes computer chips that are used in mining for the digital currency. Silvergate Bank is a digital bank that is a part of the government and can be invested in. There are a lot of ways to invest in this asset class.

LK: What are the most common mistakes people make when it comes tocryptocurrencies?

There is no way to value bitcoin. This is a common mistake perpetuated by well- respected people in the financial field, such as Jamie Dimon and Warren Buffet. Jamie Dimon made a name for himself when he said that there was no intrinsic value to the virtual currency.

The problem with economists and market analysts who make this statement is that they apply traditional economic modelling tocryptocurrencies. Digital assets have nothing in common with the stock market and they don't know it. Trying to apply traditional methodologies to digital assets is not a good idea.

If you were a market analyst, you would look at a company's product, its competitors, and its management. You would look at its finances. There is no company, no employees, no product, no revenues, and no profits if you try to do that with bitcoins. If all of those numbers are zeroes, you will conclude that there is no intrinsic value to the currency.

A flag at a 7-Eleven gas station in Lawrenceville, New Jersey, advertises a Cash2Bitcoin ATM in March of 2021.

You need to realize thatbitcoin is not a product, rather it is a network. The network's value is based on the number of users and the rate of growth of users. You can compare it to AT&T, which is a network, or to Facebook, which is a network, when you look at it from that point of view. The value of the network is increasing at a faster rate than the number of users on the network. This is the basis for how you acknowledge that the marketplace is setting the price of the digital currency.

LK: In 10 years, where are you going?

It will be a regular part of global commerce. According to McKinsey, 70% of global GDP will be digital by the end of the century. Digital currency and digital assets will be offered by every central bank in the world.

The iPhone is only 14 years old. We couldn't imagine leaving home without it. The majority of us are close to our phones. It will be a part of our life. The sooner people realize this, the quicker they will be able to take advantage of it.