Bitcoin News Today: Morgan Stanley Casts Crypto as Digital Gold in Cautious Mainstream Embrace

Morgan Stanley's Global Investment Committee (GIC) has advised institutional and wealth management clients to allocate between 2% and 4% of their portfolios to cryptocurrency, depending on risk tolerance and investment objectives. The recommendation, outlined in a recent report, positions crypto as a speculative yet increasingly mainstream asset class, with Bitcoin described as a "scarce asset akin to digital gold"Morgan Stanley Wealth Unit Advises 2% to 4% Crypto Allocation^[1]. The guidance applies across portfolio categories, ranging from 0% for wealth preservation strategies to 4% for opportunistic growth portfoliosMorgan Stanley Advises 2% to 4% Crypto Allocation for Client Portfolios^[2]. The bank emphasized that these allocations should be implemented through regulated exchange-traded products rather than direct token purchases to mitigate liquidity risksBitcoin Hits New ATH, But Morgan Stanley Caps Crypto Allocation at 4%^[3].

The GIC's framework reflects a cautious yet strategic approach to crypto integration. It recommends quarterly or annual rebalancing to prevent crypto holdings from expanding beyond intended risk thresholds, particularly during market upswingsMorgan Stanley GIC Suggests 2 to 4% Crypto Allocation Across Portfolios^[4]. This aligns with the bank's broader risk management philosophy, which acknowledges crypto's potential for high returns but cautions against its volatility and correlations with traditional assets during periods of macroeconomic stressMorgan Stanley: Crypto Allocation of up to 4% Ok in Portfolios^[5]. The guidance is directed at 16,000 Morgan Stanley advisors overseeing $2 trillion in client assets, enabling them to flexibly incorporate crypto into multi-asset portfolios while adhering to conservative exposure limitsMorgan Stanley Introduces Conservative Crypto Allocation^[6].

Bitcoin's recent performance has bolstered the case for crypto allocations. The asset reached an all-time high of $125,000 on October 5, 2025, with centralized exchange balances hitting a six-year low, signaling tightening supply and growing institutional adoptionBitcoin Hits Record $125,000 As Supply On Exchanges Tightens^[7]. Morgan Stanley's report coincides with broader market trends, including rising demand for regulated crypto investment vehicles and policy momentum in favor of digital assetsMorgan Stanley GIC Suggests 2 to 4% Crypto Allocation Across Portfolios^[8]. Bitwise Asset Management CEO Hunter Horsley described the GIC's guidance as a "huge" milestone, marking crypto's transition into the mainstream era of professional portfolio managementMorgan Stanley Advises 2% to 4% Crypto Allocation for Client Portfolios^[9].

The bank's approach contrasts with its previous stance, which excluded explicit crypto allocations from official model portfolios. Instead, it provides advisors with a structured framework to evaluate crypto exposure based on client risk profiles. For instance, balanced growth portfolios are capped at 2%, while higher-risk opportunistic strategies can allocate up to 4%. Portfolios focused on capital preservation or income generation are advised to avoid crypto entirelyMorgan Stanley: Crypto Allocation of up to 4% Ok in Portfolios^[10]. This tiered approach underscores Morgan Stanley's recognition of crypto's dual role as both an emerging technology and a volatile asset.

Looking ahead, Morgan Stanley plans to expand its crypto services, including launching crypto trading for E-Trade clients in early 2026. The initiative, supported by a partnership with crypto infrastructure firm Zerohash, aims to unlock access to $1.3 trillion in trading volumeMorgan Stanley Introduces Conservative Crypto Allocation^[11]. The bank's broader strategy reflects a calculated shift toward digital assets, balancing institutional caution with the acknowledgment of crypto's growing legitimacy. Analysts note that the guidance could catalyze demand for regulated products like Bitcoin ETFs, further integrating crypto into traditional investment frameworksBitcoin Hits Record $125,000 As Supply On Exchanges Tightens^[12].