- Itáu Asset Management advises allocating 1% to 3% of investment portfolios to Bitcoin.
- Bitcoin offers diversification benefits due to its low correlation with traditional local assets.
- Other major asset managers recommend similar bitcoin allocations, including up to 4% by Bank of America and 2% by BlackRock.
- Bitcoin’s global nature can help protect against currency depreciation and market volatility.
- Investors are encouraged to maintain a disciplined, long-term perspective without market timing.
Itáu Asset Management, Brazil’s largest private asset manager, has recommended that investors designate 1% to 3% of their portfolios to bitcoin. The guidance, shared in a year-end note by Renato Eid, head of beta strategies and responsible investment, highlighted bitcoin’s potential as a diversification element due to its minimal correlation with traditional local investments. More details about the recommendation can be found here.
The move aligns with suggestions from other leading asset managers. For example, Bank of America has approved wealth advisors recommending bitcoin allocations up to 4%, while BlackRock has cited a 2% allocation as appropriate for portfolios. Eid stressed that bitcoin should not dominate investment portfolios but instead serve as a complementary asset to help balance risks related to currency decline and global market turbulence.
Bitcoin’s price hit an all-time high near $125,000 in 2024 before adjusting to around $90,000. For investors holding local currency, returns have been more volatile due to fluctuations in exchange rates. Investment products like BITI11, a bitcoin ETF traded in Brazil, have reflected those currency impacts. However, the global scope of bitcoin provided some protection during critical periods, such as late 2024.
Eid cautioned against attempting to predict market movements. He advocated for a steady, long-term investment approach, keeping bitcoin exposure moderate and aligned with the investor’s risk tolerance. According to Eid, a strategic allocation in the 1%–3% range can partially hedge against traditional market correlations becoming less reliable. He wrote, “It calls for moderation and discipline: set a strategic slice (for example, 1%–3% of the total portfolio), keep a long-term horizon and resist the temptation to react to short-term noise.”
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