Bitcoin News Today: Crypto ETFs Reshape Portfolios as Institutions Hedge Against Fiscal Turmoil

Bitcoin and stocks are gaining momentum as U.S. fiscal pressures intensify, driven by record inflows into crypto exchange-traded funds (ETFs) and institutional adoption of digital assets. Morgan Stanley's Global Investment Committee (GIC) recently advised clients to allocate 2% to 4% of portfolios to cryptocurrencies, depending on risk tolerance, positioning Bitcoin as a speculative yet mainstream asset class akin to "digital gold." This guidance, shared with 16,000 financial advisors overseeing $2 trillion in client wealth, signals a shift in institutional sentiment toward crypto as a diversification toolMorgan Stanley Wealth Unit Advises 2% to 4% Crypto Allocation^[1].

Bitcoin surged to a record $125,000 in October 2025, fueled by ETF inflows that outpaced new supply by a factor of 8.9x. U.S. spot Bitcoin ETFs added 20,685 BTC in a single week, with Fidelity's FBTC and BlackRock's IBIT leading the charge. These funds now hold 1.32 million BTC, surpassing July's record and tightening liquidity on exchanges. Analysts attribute the rally to a weakening U.S. dollar, which has fallen over 12% year-to-date, and macroeconomic uncertainty, including a government shutdownBitcoin Price Hits $125,000 Through ETF Inflows^[2].

The U.S. deficit expansion, coupled with inflation above 3.1%, has prompted investors to seek alternatives. BlackRock's research highlights Bitcoin's low correlation with traditional assets, noting that even a 1-3% allocation in a 60/40 portfolio historically improved risk-adjusted returns. The firm increased its Target Allocation with Alternatives model portfolio to include Bitcoin and gold, framing them as hedges against geopolitical and inflationary risksDiversifying with Bitcoin, Gold, and Alternatives - BlackRock^[3].

Institutional adoption is accelerating, with Morgan Stanley planning to launch crypto trading for E-Trade clients in early 2026. The bank's collaboration with Zerohash to provide custody and settlement infrastructure underscores its commitment to digital assets. Meanwhile, ETF inflows have transformed Bitcoin into a regulated, allocation-driven market, with $2.34 billion in weekly flows in late 2025. This trend has pushed Bitcoin ETFs into the top 100 global ETFs by assets under management, with IBIT nearing $82 billion in assetsBitcoin ETF Inflows Outpace Supply^[4].

Analysts predict further gains as macroeconomic tailwinds persist. Bitcoin's price action, supported by ETF demand and a declining U.S. dollar, has drawn comparisons to gold's role in portfolios. Charles Edwards of Capriole Investments and CrediBULL Crypto anticipate a move toward $150,000 by year-end, citing historical October strength and institutional accumulation. However, volatility remains a risk, with seven-day realized volatility below 0.7%, suggesting a potential breakout once the current range resolvesBitcoin Eyes $150K as ETF Inflows and Dollar Weakness Fuel Rally^[5].

The convergence of U.S. fiscal dynamics, institutional crypto integration, and ETF-driven demand positions Bitcoin and stocks as beneficiaries of a broader reallocation of capital. As Morgan Stanley and other firms formalize crypto allocations, the asset class is increasingly viewed as a legitimate component of diversified portfolios, balancing growth and risk amid macroeconomic uncertainty.