Morgan Stanley’s Global Investment Committee has officially advised clients to allocate between 2% and 4% of their portfolios to bitcoin and cryptocurrency.
The recent report, published on October 1, details crypto (mainly bitcoin) allocations based on various investor risk profiles. Opportunistic growth portfolios, which aim for higher-risk and higher-return strategies, should feature up to 4% in crypto, while balanced growth portfolios should be limited to 2%, according to the report.
The committee that authored the report described bitcoin as a scarce asset, likening it to digital gold, and suggesting that it plays a legitimate role in diversified investment strategies.
“We categorize this emerging asset class as part of real assets, focusing primarily on bitcoin, which we view as a scarce asset, similar to digital gold,” the report stated.
While Morgan Stanley recognized the historical volatility of the asset class and its potential for high correlation with broader markets during stressful times, it also observed that the total returns and structural maturity of crypto have improved in recent years.
Morgan Stanley: Acquire crypto ‘every quarter’
The firm recommended that clients regularly rebalance their multi-asset portfolios to incorporate crypto—preferably every quarter or at least once a year.
“This rebalancing will mitigate the risk of excessive positions, which can contribute to significant portfolio-level volatility and increased cryptocurrency risk during macro and market stress,” the report noted.
The guidance suggested gaining exposure through exchange-traded products to manage volatility and avoid portfolio distortions during strong upward trends. This strategy reflects a measured yet open approach to incorporating crypto into traditional investment frameworks.
This announcement comes as bitcoin hits a new all-time high of approximately $126,200 today. This increase marks the continuation of a nine-day rally, driven by spot ETF inflows and a declining U.S. dollar amidst renewed concerns about a government shutdown.
Morgan Stanley’s latest insights follow its September move to broaden digital asset access through its E*Trade platform, allowing trading in bitcoin and other cryptocurrencies through a partnership with Zerohash.
