Bitcoin Hits New ATH, But Morgan Stanley Caps Crypto Allocation at 4%

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Morgan Stanley has released its October Global Investment Committee report, recommending that clients allocate 2% to 4% of their portfolios to cryptocurrency. The bank framed this as an appropriate level of exposure given the asset class’s volatility and unique market dynamics.

The report described crypto as speculative but increasingly mainstream, showing Bitcoin as a type of “digital gold.” It placed Bitcoin in the broader category of real assets, reflecting its growing role in investment strategies while keeping the focus on balanced portfolio allocation.

Description	Wealth Conservation	Income	Balanche Growth	Market Growth	Opportunity Growth
Risk profile	1	2	3	4	5
Max crypto allocation	0%	0%	2%	3%	4%

The report also advised investors to review and rebalance their portfolios at least once a year. This prevents crypto holdings from growing beyond their intended share, which could raise overall risk.

According to the bank, cryptocurrency has a role in modern investment strategies, but allocations should remain controlled. The goal, it noted, is to give investors measured exposure to emerging technology rather than unchecked risk.

The report said, “While the GIC allocation models will not include explicit allocations to cryptocurrency, we aim to support our financial advisors and clients, who may flexibly allocate to cryptocurrency as part of their multi-asset portfolios.”

Replying to this, Bitwise Asset Management CEO Hunter Horsley said, “This is huge.” Thanking the growing role of crypto in professional portfolio management, Horsley added, “We’re entering the mainstream era.” 

How To Rebalance a Portfolio? 

Caleb & Brown, an Australia-based crypto brokerage, says that a well-balanced crypto portfolio can significantly reduce risk factors. It recommends users to do their own research before investing and use assets with a payment solution. like Bitcoin, XRP, and stablecoins. It also advised the investors to ‘never invest more than they can afford.’

In a blog post, the brokerage said, “There is no one-size-fits-all approach to building a portfolio, and each strategy comes with different trade-offs for different types of traders or investors, depending on their goals, risk appetite, and profile. Essentially, your ability to accept potential losses or large fluctuations in unrealised gains or losses could provide higher returns in the long term.”