Morgan Stanley’s (NASDAQ: MS) Global Investment Committee (GIC) has featured digital assets in its latest special wealth management report, recommending that portfolio managers take a ‘conservative’ approach to the asset class and endorsing allocations of up to 4%.
The report is the latest in a series issued by the GIC on an ad-hoc basis, typically addressing particularly current topics and themes. In this case, it focuses on “Asset Allocation Considerations for Cryptocurrencies.”
“Cryptocurrency has attracted significant attention in recent years, given its outsized returns, elevated volatility, growth to $4 trillion in market capitalization and increased support from the Trump administration and Congress.”
The report goes on to provide a table of the GIC’s recommendations as to what percentage of multi-asset portfolios should be allocated to ‘cryptocurrency.’ It provides recommended allocations based on five risk profiles. For ‘pure wealth conservation’ and/or ‘income,’ it recommends an allocation of zero; ‘balanced growth’ is recommended at 2%; ‘market growth’ is recommended at 3%, and ‘opportunistic growth’ is recommended at 4%.
Morgan Stanley issuing such clear guidance is undoubtedly a sign of the growing role that digital assets are playing in mainstream portfolios.
However, the report shouldn’t be taken as an unreserved endorsement of the asset class. The recommended levels are also somewhat modest, and come with a clear caveat that the asset is not appropriate for all portfolios:
“The Global Investment Committee (GIC) considers cryptocurrency as a speculative and increasingly popular asset class that many investors, but not all, will seek to explore.”
Additionally, though the report presents as an assessment of digital assets generally, it is careful to note that it primarily focuses on BTC only, which Morgan Stanley says it considers as a “scarce asset akin to digital gold.”
It also indicates that portfolio managers are still best off gaining exposure to BTC via exchange-traded products (ETPs), such as the roster of dedicated ‘crypto’ funds that have cropped up in recent years.
It further warns that “while the emerging asset class has experienced outsized total returns and declining volatility over recent years, cryptocurrency could experience more elevated volatility and higher correlations with other asset classes in periods of macro and market stress.”
Still, it’s impossible to ignore the overall lean toward digital assets on the part of Morgan Stanley, especially in 2025.
The GIC published a primer on ‘Investing in Cryptocurrency’ in August, discussing the history of the asset class, reasons for its success, and potential risks. Though far from an endorsement or recommendation, the primer discussed the valuable aspects of digital assets, specifically BTC, as being trustless, permissionless, and scarce. At the same time, it identified three key risks as encryption vulnerabilities, risks posed by software bugs and government intervention.
Then, in September, it was revealed that Morgan Stanley was on the verge of offering BTC trading through its E-Trade platform. The service is said to be planned for early 2026.
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Source: https://coingeek.com/morgan-stanley-tentatively-embraces-digital-assets/