Morgan Stanley is advising a "conservative" approach to cryptocurrency allocation for certain investment portfolios, according to a recent report by the financial services firm's Global Investment Committee (GIC). The report, aimed at investment advisors, suggests that cryptocurrencies can be a part of a diversified portfolio, but recommends modest allocations and periodic rebalancing.
The GIC proposes different allocation levels based on the portfolio's risk profile. For "Opportunistic Growth" portfolios, designed for higher risks and higher returns, the analysts recommend a maximum of 4% allocation to cryptocurrencies. "Balanced Growth" portfolios, which have a more moderate risk profile, should consider up to a 2% allocation. However, the report advises a 0% allocation for portfolios focused on wealth preservation and income.
The committee considers cryptocurrency an "emerging, speculative asset class" that has matured enough to be included in diversified portfolios. They explicitly liken Bitcoin to "digital gold," highlighting its appeal as a scarce asset. This perspective aligns with the increasing institutional adoption of Bitcoin as a treasury reserve asset and through investment vehicles like exchange-traded funds.
Hunter Horsley, CEO of investment manager Bitwise, described the report as significant, noting that the Global Investment Committee guides 16,000 advisors managing $2 trillion in savings and wealth for clients.
Morgan Stanley's recommendations come as the cryptocurrency market experiences increased interest from institutional investors. Bitcoin recently surpassed $125,000, reaching a new all-time high. This surge coincides with a decrease in the number of coins held by exchanges available for purchase.
In addition to offering guidance on crypto allocation, Morgan Stanley is also expanding its services related to digital assets. The company's E*Trade platform is set to launch spot trading for Bitcoin, Ethereum, and Solana in the first half of 2026. To provide liquidity and custody services, Morgan Stanley has partnered with Zerohash. This collaboration aims to ensure secure transactions and a robust trading platform for cryptocurrency investments.
The financial services company is also launching a new strategy that allows clients to allocate a portion of their portfolios to digital assets, tailored to individual risk tolerance. While allocations will be customized, most clients can expect suggested allocations to be minimal, typically ranging from zero to a few percentage points.
