Morgan Stanley recommends 'conservative' crypto allocation for some portfolios

Morgan Stanley's recent report advises investment advisors on cryptocurrency allocations in multi-asset portfolios, recommending a conservative approach. For 'Opportunistic Growth' portfolios, designed for higher risk and returns, a 4% allocation to cryptocurrencies is suggested, while a 2% allocation is appropriate for 'Balanced Growth' portfolios with moderate risk profiles. For portfolios focused on wealth preservation and income, a 0% allocation is recommended due to potential volatility and correlation with other assets during market stress. This guidance reflects growing institutional interest in crypto as a legitimate asset class. Bitcoin, regarded as a 'scarce asset akin to digital gold,' is noted for its institutional gains and recent price surge to over $125,000. The report underscores the importance of rebalancing portfolios periodically in response to market trends and economic conditions.

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