Itaú Unibanco, Latin America’s largest private bank, has advised its investment arm to allocate a limited but strategic place for Bitcoin in its portfolios.
Renato Eid, head of beta strategies and responsible investing at Itaú Asset Management, stated in a research note that a “calibrated” portfolio allocation of 1 to 3 percent for Bitcoin is reasonable.
Eid emphasized that crypto assets should not form the main backbone of a portfolio, suggesting that Bitcoin should be considered a complementary element.
According to him, this approach offers the potential for returns with low correlation to local economic cycles, while also providing partial protection against currency depreciation and harboring the possibility of long-term appreciation. Eid also highlighted the importance of a long-term perspective, warning against the risks of trying to time the market.
The research note also referenced Itaú’s own product, the BITI11 Bitcoin ETF, which is traded on the Brazilian exchange B3.
Developed in partnership with Galaxy Digital, this product launched in 2022 and has approximately $115.6 million in assets under management. Eid stated that adding BITI11 to portfolios offers a dual opportunity in terms of “international diversification and as a global store of value.”
This recommendation is also driven by currency volatility, a problem specific to Brazil. As the Brazilian real falls to historic lows against the dollar by the end of 2024, this has increased interest in globally priced assets.
Itaú’s proposal signals the increasing acceptance of crypto assets in the traditional financial world, and the fact that global giants like Bank of America are proposing similar crypto allocation rates supports this trend.
*This is not investment advice.