Morgan Stanley advises up to 4% bitcoin allocation in portfolio

Morgan Stanley’s Global Investment Committee officially recommends that clients allocate 2% to 4% of their portfolio to Bitcoin and crypto.

A new report issued on October 1st outlines Crypto (mainly Bitcoin) allocation based on investors’ risk profiles. Opportunistic growth portfolios targeting higher risk and higher return strategies should include up to 4% in their crypto, while balanced growth portfolios are limited to 2%, the report read.

The committee that wrote the report characterizes Bitcoin as a rare asset comparable to digital gold, suggesting it plays a legitimate role in a diversified investment strategy.

“We focus on comments on Bitcoin, which places emerging asset classes within real assets and primarily considers rare assets similar to digital gold,” the report read.

Morgan Stanley acknowledged the possibility of a high correlation between historic volatility of asset classes and broader markets during stress periods, but also noted that in recent years, total crypto revenues and structural maturity have improved.

Morgan Stanley: Purchase Cryptocurrency “Quarterly”

Morgan Stanley said clients should periodically recalibrate their multi-asset portfolios to include Crypto.

“This rebalance weakens the possibility of an inflation position. This could mean the contribution of voice portfolio-level volatility and cryptocurrency risk during periods of macro-stress and market stress,” the report read.

This report recommended that you acquire exposure through exchange-sold products to manage volatility and prevent portfolio distortions during strong uptrends. This approach shows a measured but openness to integrate crypto within traditional investment frameworks.

The announcement coincided with Bitcoin reaching a new all-time high of around $126,200 today. The move extended a nine-day rally supported by an influx of spot ETFs and weakening of the US dollar amid updated concerns about government shutdowns.

Morgan Stanley’s latest guidance will expand digital asset access through the e* trade platform following its September decision to enable trading in Bitcoin and other cryptos via the Zerohash partnership.