Morgan Stanley’s Global Investment Committee officially recommends that clients allocate 2% to 4% of their portfolios to Bitcoin and crypto.
A new report published on October 1st outlines the allocation of Crypto (primarily Bitcoin) based on an investor’s risk profile. Opportunistic growth portfolios targeting higher risk and higher return strategies should include up to 4% in crypto, while balanced growth portfolios are limited to 2%, the report read.
The committee that wrote the report characterized Bitcoin as a rare asset comparable to digital gold, suggesting it has a legitimate role in a diversified investment strategy.
“We place emerging asset classes within physical assets and primarily focus our comments on Bitcoin considering rare assets similar to digital gold,” the report read.
Morgan Stanley acknowledged the asset class’s historical volatility and possible high correlation with the broader market during periods of stress, but also noted that crypto’s total returns and structural maturity have improved in recent years.
Morgan Stanley: Buy Crypto “Quarterly”
Morgan Stanley said clients should periodically rebalance their multi-asset portfolios to include Crypto.
“Such rebalancing weakens the likelihood of an inflated position. This may imply a contribution of voice portfolio-level volatility and cryptocurrency risk during periods of macro and market stress,” the report read.
The report recommended gaining exposure through exchange sales products to manage volatility and prevent portfolio distortion during strong uptrends. This approach demonstrates a measured yet open attitude to integrating crypto within traditional investment frameworks.
This announcement coincided with Bitcoin reaching a new all-time high of around $126,200 today. The move extended a nine-day rally buoyed by spot ETF inflows and a weakening U.S. dollar amid renewed fears of a government shutdown.
Morgan Stanley’s latest guidance follows its September decision to enable trading of Bitcoin and other cryptos through its Zerohash partnership, expanding digital asset access through its e*Trade platform.
Source: https://bitcoinmagazine.com/business/morgan-stanley-advises-btc-allocation
