Morgan Stanley Opens Door to Crypto in Investment Portfolios

The bank’s Global Investment Committee advised up to 4% exposure for high-risk portfolios and 2% for moderate ones, which suggests that there is growing institutional confidence in digital ￰0￱ move was praised by Bitwise CEO Hunter Horsley as “huge,” and comes as Bitcoin hit a new all-time high above $125,000. Morgan Stanley Embraces Crypto Exposure Morgan Stanley took a major step toward legitimizing cryptocurrency as an investable asset class after issuing formal guidelines for crypto allocations in multi-asset ￰1￱ its October Global Investment Committee (GIC) report, the financial services giant advised a “conservative” approach but nonetheless included crypto exposure in select portfolio types, which is a huge shift in institutional ￰2￱ to the report, Morgan Stanley analysts recommended up to a 4% crypto allocation for “Opportunistic Growth” portfolios, which are designed for investors looking for higher returns and willing to accept more ￰3￱ “Balanced Growth” portfolios, the report suggested a smaller 2% allocation for those with a more moderate risk appetite.

() However, for portfolios centered on wealth preservation and income generation, the firm advised a 0% allocation, due to the potential for elevated volatility during periods of market or macroeconomic ￰4￱ GIC report acknowledged that, while cryptocurrencies delivered outsized returns over the past few years and seen a trend toward declining volatility, they still pose unique risks compared to traditional assets. Nonetheless, the fact that Morgan Stanley’s guidance now actually includes digital assets at all is a turning point for mainstream ￰5￱ CEO Hunter Horsley called the move “huge,” especially as the GIC’s recommendations reach around 16,000 advisors managing $2 trillion in client wealth.

“We’re entering the mainstream era,” Horsley wrote, thanks to the growing role of crypto in professional portfolio ￰6￱ timing of Morgan Stanley’s report coincides with Bitcoin reaching a new all-time high of over $125,000. The bank’s analysts referred to Bitcoin as “digital gold,” due to its perceived scarcity and growing role in institutional treasuries and exchange-traded funds. BTC’s price action over the past week () Data from Glassnode shows Bitcoin exchange balances fell to a six-year low, which suggests strong accumulation by ￰7￱ at The Kobeissi Letter added that a broader shift toward assets like Bitcoin and gold is underway as inflation rebounds and economic uncertainty ￰8￱ could mean that there is a growing appetite for scarce, non-sovereign assets in times of financial stress.