In its October 2025 Global Investment Committee (GIC) report, Morgan Stanley has recommended a conservative approach to cryptocurrency allocations in multi-asset portfolios. This marks a significant shift in the attitude institutional players have towards digital assets. It also reflects cryptocurrencies’ growing legitimacy as part of a diversified investment strategy.
Crypto allocation recommendations
According to Morgan Stanley’s GIC report, they have advised crypto allocations between 2% to 4%, based on investor risk profiles. The focus is mainly on Bitcoin, touted as ‘digital gold’, and its scarcity gives it real asset appeal, and encourages flexible allocation strategies.
For opportunistic growth portfolios, they recommend up to 4% allocation. This, they say, is suitable for investors with higher risk tolerance seeking higher returns. They recommend a 2% allocation for clients with balanced growth portfolios. These are portfolios designed for moderate risk profiles aiming for steady growth.
They’ve asked clients with wealth preservation and income portfolios to refrain from any crypto allocations. They say concerns over potential volatility and the correlation with other asset classes during macroeconomic stress might be reason enough for them to stay away. The report emphasizes that while cryptocurrencies have demonstrated substantial returns and declining volatility in recent years, they may experience increased volatility and higher correlations with traditional assets during periods of market stress.
Institutional shift and evolution
Historically, major financial institutions have shown skepticism towards cryptocurrencies, often labeling them as speculative and volatile. However, over the past few years, there has been a noticeable shift. The GIC’s recommendation is just one move that proves the growing acceptance of digital assets. There is a formal acknowledgement of their potential role in portfolio diversification. This change is attributed to factors such as improved market stability, increasing institutional adoption, and favorable regulatory developments.
Hunter Horsley, CEO of Bitwise, lauded Morgan Stanley’s move, describing it as ‘huge’ news. He highlighted that the GIC guides approximately 16,000 advisors managing $2 trillion in client assets. An outright recommendation from the likes of Morgan Stanley would be a leg up towards mainstream adoption of cryptocurrencies.
Morgan Stanley’s cautious endorsement of cryptocurrency allocations is a pivotal moment in the integration of digital assets into traditional finance. As institutional interest grows, the landscape of investment strategies will continue to evolve. This can potentially increase capital flows into the crypto market and further legitimize digital assets as a viable investment class.