Brazil’s largest privately-owned asset manager, Itáu Asset Management, has made waves in the financial community by recommending that investors allocate between 1% and 3% of their portfolios to bitcoin, currently valued around $90,104.48. This insight comes from Renato Eid, who leads beta strategies and responsible investment at the firm, in a year-end note that underscores the cryptocurrency’s potential as a diversification tool.
Eid argued that bitcoin exhibits a lack of correlation with traditional local assets, making it a compelling option for investors looking to enhance their portfolios with assets that can withstand market volatility. This recommendation aligns with sentiments expressed by other major asset managers in the industry. Earlier this month, Bank of America authorized its wealth advisors to suggest a BTC allocation of up to 4%, while BlackRock indicated a preference for 2%.
In his note, Eid emphasized a cautious approach to cryptocurrency investments. He advised against positioning crypto as the core component of a portfolio; instead, investors should regard it as a supplementary asset that can help mitigate risks linked to currency depreciation and global financial fluctuations. “The idea is not to make cryptoassets the core of the portfolio but to include them as a complementary component — sized appropriately to the investor’s risk profile,” his note stated.
The volatility of bitcoin has been notable over the past year, with the cryptocurrency reaching an unprecedented high of nearly $125,000 before retreating to its current value. Local investors in Brazil faced additional challenges, as fluctuations in the national currency impacted the performance of bitcoin-related exchange-traded funds (ETFs) like BITI11. Despite these challenges, Eid highlighted that bitcoin’s global nature provides a degree of shielding during tumultuous periods, such as late 2024.
In his reflections, Eid cautioned against attempting to time the market, advocating instead for a disciplined, long-term investment strategy. He suggested that maintaining a small, consistent exposure to bitcoin can serve as a partial hedge against economic uncertainties and also open avenues to global returns as links between traditional assets become increasingly unreliable.
“Moderation and discipline are essential: 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,” Eid remarked, outlining a framework for prudent investment in the evolving landscape of digital assets.
