Morgan Stanley’s Global Investment Committee (GIC) has indicated that cryptocurrencies have achieved enough mainstream relevance to deserve a place in multi-asset portfolios.
"We aim to support our Financial Advisors and clients, who may flexibly allocate to cryptocurrency as part of their multiasset portfolios," it said.
Cryptocurrency-based exchange-traded funds (ETFs) are preferable to direct investments in crypto, according to Morgan Stanley.
"Huge"
It should be noted that the GIC has tremendous influence since it guides a total of 16,000 financial advisors and clients who manage roughly $2 trillion worth of assets.
Bitwise CEO Hunter Horsley has described the endorsement as "huge," adding that this is yet another sign of crypto going mainstream.
"This is big. I know the GIC members well…Powerful stuff for the crypto community, Astoria Portfolio Advisors founder and CEO John Davi said in a social media post.
Possible risks
That said, the committee has also cautioned about some risks that are associated with crypto, including spikes in volatility.
Hence, financial advisors have been advised not to opt for outsized cryptocurrency allocations and stick to a conservative approach.
The most conservative profiles ("Wealth Conservation" and "Income") should gain zero cryptocurrency exposure, according to the GIC.
Meanwhile, the most aggressive investment profile ("Opportunistic Growth") should allocate roughly 4% of its assets to crypto.
Dan Burgin
Vladislav Sopov
U.Today Editorial Team