Itau Asset Management, the largest private asset management company in Brazil, recommended that investors allocate between 1% and 3% of their investment portfolios to Bitcoin (BTC).
This recommendation came in a memo issued at the end of the year by Renato Eid, Head of Beta Strategies and Responsible Investment at Itau Asset Management.
The logic behind the recommendation (diversification and hedge tool):
Eid confirmed that the lack of correlation between Bitcoin and traditional local assets makes it an extremely useful diversification tool for the portfolio. He noted that Bitcoin acts as a complementary asset that can help absorb shocks from the depreciation of the local currency and global volatility.
Key points and additional details:
* Allocation approach: Eid emphasized the importance of following a disciplined and thoughtful approach, explaining that "the idea is not to make cryptocurrencies the core of the portfolio but to include them as a complementary element — in a size appropriate to the investor's risk profile."
* Hedge against currency volatility: For local investors in Brazil, fluctuations in the foreign exchange market have made the investment journey more challenging. During periods of market stress and strain, such as occurred in late 2024 (according to the article), the global nature of Bitcoin provided a degree of protection and insulation for investors from the repercussions of local currency depreciation (Brazilian real).
* Long-term outlook: Eid warned against trying to time the market and instead suggested maintaining a disciplined and long-term mindset. He noted that a small and stable exposure to Bitcoin could act as a partial hedge and provide access to global returns, especially as the reliability of correlations between traditional assets diminishes.
* Advice for investors: Eid wrote: "It requires moderation and discipline: set a strategic allocation (for example, 1% - 3% of the total portfolio), maintain a long-term time horizon, and resist the temptation to react to short-term noise."
* Synchronization of recommendations: Itau's recommendation aligns with those of other major asset managers, as Bank of America previously allowed wealth advisors to recommend allocating up to 4% to Bitcoin, while BlackRock indicated a 2% allocation.
