Brazil’s leading privately-owned asset manager, Itáu Asset Management, suggests that investors consider allocating between 1% and 3% of their portfolios to bitcoin .
In a year-end report, Renato Eid, the head of beta strategies and responsible investment at Itaú Asset Management, noted that bitcoin’s low correlation with traditional local assets makes it a beneficial diversification strategy.
This recommendation aligns with suggestions from other prominent asset managers. Earlier this month, Bank of America empowered wealth advisors to suggest a BTC allocation of up to 4%, while BlackRock confirmed a 2% recommendation.
Eid stressed the importance of a cautious approach, advising against making crypto the focal point of a portfolio and instead utilizing it as a supportive asset that can help mitigate impacts from currency depreciation and global uncertainty.
“The goal is not to center portfolios around cryptoassets but to incorporate them as an additional element—appropriately scaled to the investor’s risk profile,” Eid stated.
This year, bitcoin soared to an all-time high nearing $125,000 before retracting to approximately $90,000. Local investors encountered an even more erratic experience due to currency variations.
Investment products like BITI11, a bitcoin ETF available in Brazil, faced performance challenges in reais due to a depreciating fiat currency. However, in stressful periods, such as late 2024, the global nature of BTC offered some protection.
Eid cautioned against attempting to time the market, advocating for a disciplined, long-term view. He believes that a modest, consistent exposure to bitcoin can serve as a partial hedge and provide access to global returns, especially as the correlations of traditional assets become increasingly unreliable.
“It necessitates moderation and discipline: establish a strategic allocation (for instance, 1%–3% of the entire portfolio), maintain a long-term outlook, and resist the urge to react to fleeting market fluctuations,” Eid concluded.
