Itáu Asset Management, Brazil’s largest private asset management company, recommends that investors allocate 1% to 3% of their portfolios to Bitcoin .
Renato Eid, head of beta strategy and responsible investing at Itaú Asset Management, noted in a year-end report that Bitcoin’s lack of correlation with traditional local assets makes it a useful diversification tool.
The report echoes Bitcoin allocations recommended by other major asset managers. Earlier this month, Bank of America approved wealth advisors recommending an increase in BTC allocation to 4%, while BlackRock recommended a 2% allocation.
Eid emphasized a cautious approach, not turning cryptocurrencies into the core of an investment portfolio, but using them as complementary assets that can help absorb the shock of currency depreciation and global volatility.
“The idea is not to make crypto-assets the core of a portfolio, but to use them as complementary components – sized to fit an investor’s risk profile,” Eid wrote.
This year, Bitcoin surged to a record close to $125,000 before falling back to around $90,000. For local investors, the process is even more bumpy due to currency fluctuations.
The real performance of products such as the Bitcoin ETF BITI11 traded in Brazil has been affected by weakness in fiat currencies. But during times of stress, such as late 2024, BTC’s global nature provides some insulation.
Eid warns against trying to time the market and advises maintaining a disciplined long-term mindset. He said small, steady exposure to Bitcoin could act as a partial hedge and provide opportunities for global returns, especially as traditional asset correlations become less reliable.
“It requires moderation and discipline: set a strategic share (e.g., 1%-3% of the total portfolio), maintain a long-term view, and resist the temptation to react to short-term noise,” Eid writes.