Morgan Stanley has released new guidelines recommending modest bitcoin allocations for select investment portfolios, reflecting a growing acceptance of bitcoin in mainstream finance.
Guidelines for portfolio allocation
According to the October Global Investment Committee (GIC) report, Morgan Stanley analysts suggest up to a 4% allocation to bitcoin for ‘Opportunistic Growth’ portfolios, which target higher risk and returns.
For ‘Balanced Growth’ portfolios, a maximum allocation of 2% is advised.
However, no allocation is recommended for portfolios focused on wealth preservation or income.
The report states:
“While the emerging asset class has experienced outsized total returns and declining volatility over recent years, cryptocurrency could experience more elevated volatility and higher correlations with other asset classes in periods of macro and market stress.”
Institutional adoption continues
Industry figures, such as Bitwise CEO Hunter Horsley, highlighted the significance of the report, noting that GIC guidance reaches 16,000 advisors managing $2 trillion in client assets.
The move underscores how large financial institutions are driving further mainstream acceptance of bitcoin, including via investment vehicles like exchange-traded funds.
Bitcoin’s digital gold narrative grows
Morgan Stanley analysts describe bitcoin as a “scarce asset, akin to digital gold.”
The bank’s report comes as bitcoin recently reached a new all-time high above $125,000, while exchange balances fell to six-year lows—suggesting increased long-term holding and adoption as a treasury reserve asset.
Macro backdrop supports bitcoin surge
Bitcoin’s surge coincided with a U.S. government shutdown and rising demand for safe-haven assets. Investment analysts at The Kobeissi Letter commented:
“There is a widespread rush into assets happening right now. As inflation rebounds and the labor market weakens.”
