Morgan Stanley’s latest report brings crypto assets closer to the mainstream, as it advises diversifying investment portfolios with up to 4% share of reputable cryptocurrencies.
In a recent statement, Morgan Stanley Global Investment Committee (GIC) recommended that investors allocate a modest portion (between 2% and 4%) of their portfolios to bitcoin and other cryptocurrencies, depending on their risk tolerance.
The guidance suggests that balanced growth portfolios should include no more than 2% of crypto, while opportunistic growth portfolios, which pursue higher-risk, higher-return strategies, may go up to 4%.
The report positions bitcoin as a “scarce asset” similar to digital gold, noting that it now plays a legitimate role in diversified investment strategies. Despite acknowledging crypto’s historical volatility and tendency to correlate with broader markets during stress periods, Morgan Stanley highlighted the sector’s growing maturity and improved long-term returns.
GIC described cryptocurrency as a speculative and increasingly popular asset class that many investors, but not all, will seek to explore. The Singaporean sovereign wealth fund’s comment reflects a measured stance toward digital assets, acknowledging their rising appeal among global investors while emphasizing that crypto may not align with every portfolio or risk profile. This characterization underscores GIC’s cautious but observant approach to the evolving crypto landscape, recognizing its growing role in modern finance but also paying attention to risks involved.
The bank’s strategists advised clients to rebalance their portfolios quarterly or at least annually to prevent excessive exposure to crypto during market surges, which can increase portfolio-level risk. They also recommended that investors gain exposure through exchange-traded products (ETPs) rather than holding crypto directly, as this approach helps manage volatility and maintain diversification.
The report comes as bitcoin hit a record high of around $126,200, extending a nine-day rally driven by ETF inflows and a weaker U.S. dollar amid renewed concerns about a potential government shutdown.
This latest guidance follows Morgan Stanley’s September move to expand access to digital assets via its E-Trade platform, enabling clients to trade bitcoin and other cryptocurrencies through a partnership with Zerohash, a sign of the bank’s increasingly measured but open stance toward crypto integration within traditional finance.
