Morgan Stanley’s Global Investment Committee has officially suggested that customers allocate between 2% and 4% of their portfolios to bitcoin and cryptocurrencies.
The recent report, released on October 1, specifies crypto (mainly bitcoin) allocations based on investor risk profiles. Opportunistic growth portfolios, aimed at higher-risk and higher-reward strategies, should encompass up to 4% in crypto, whereas balanced growth portfolios are limited to 2%, as stated in the report.
The committee responsible for the report depicted bitcoin as a limited asset comparable to digital gold, indicating that it now holds a valid position within diversified investment strategies.
“We categorize this emerging asset class among real assets, focusing our discussion here primarily on bitcoin, which we regard as a limited asset, similar to digital gold,” the report stated.
While Morgan Stanley acknowledged the asset class’s historical fluctuations and potential for strong correlation with broader markets during periods of stress, it also noted that crypto’s total returns and structural development have improved in recent years.
Morgan Stanley: Purchase crypto ‘every quarter’
Morgan Stanley advised that clients should routinely rebalance their multi-asset portfolios to incorporate crypto — ideally every quarter, or at the very least once a year.
“Such rebalancing will reduce the likelihood of inflated positions, which could result in exaggerated portfolio-level volatility and cryptocurrency risk contributions during periods of macroeconomic and market strain,” the report stated.
The report suggested gaining exposure via exchange-traded products to manage volatility and avert portfolio distortion during substantial uptrends. This strategy reflects a cautious yet open approach towards incorporating crypto within traditional investment frameworks.
The announcement coincided with bitcoin achieving a new all-time high of approximately $126,200 today. This move extended a nine-day rally, bolstered by spot ETF inflows and a declining U.S. dollar amid renewed government shutdown anxieties.
Morgan Stanley’s latest guidance follows its September decision to enhance digital asset access through its E*Trade platform, facilitating trading in bitcoin and other cryptocurrencies via a Zerohash partnership.