Morgan Stanley Endorses Small Crypto Exposure as Wall Street’s Tone Softens
Morgan Stanley’s Global Investment Committee (GIC) has advised clients to allocate as much as 4% of their portfolios to cryptocurrencies — its highest suggested weighting for the asset class — marking another sign of mainstream acceptance among large financial institutions.
In an Oct. 1 note viewn by investors and shared publicly by Bitwise CEO Hunter Horsley, the committee said portfolios targeting “opportunistic growth” could include up to 4% in digital assets, while “market growth” and “balanced growth” strategies should hold 3% and 2% respectively. More conservative investors, focused on income or capital preservation, were told to avoid crypto entirely.
The bank described digital assets as “a speculative and increasingly popular asset class that many investors, but not all, will viewk to explore,” likening BTC to “digital gold.” It also cautioned that portfolios should be regularly rebalanced to avoid oversized rallies, citing the potential for sharp drawdowns and volatility.
The guidance places Morgan Stanley alongside a growing list of traditional managers acknowledging a place for crypto in diversified portfolios.
BlackRock has previously recommended a 1%–2% weighting in models suggest allocations of 2%–5% could enhance long-term returns under favorable adoption scenarios. Grayscale and VanEck go further, proposing 5% and 6% respectively.
Even Charles Schwab, once cautious, has opened limited access to crypto platform-traded funds (ETFs) and plans to expand offerings to include spot by 2026.
Vanguard, long one of the most skeptical voices on Wall Street, has resisted listing on its brokerage platform and has repeatedly described crypto as too immature for retirement portfolios. But reports last week indicated the firm is re-evaluating that stance under new CEO Salim Ramji, a former BlackRock executive viewn as more receptive to digital assets. A Vanguard spokesperson said the company is “continuously evaluating” investor demand and the regulatory landscape.
From “Fraud” to Allocation Model
That major weightings underscores a dramatic shift from just a few years ago, when some bank chiefs dismissed BTC as a “fraud.”
Morgan Stanley, which began offering limited BTC exposure to wealth-management clients in 2021, now joins BlackRock, Fidelity, and others in framing digital assets as part of the broader “real asset” category — a hedge against monetary debasement and, increasingly, a component of long-term diversification.
While the GIC reiterated that cryptocurrencies remain speculative, its inclusion of the asset class within official model portfolios signals how deeply digital assets have entered mainstream investment discourse — and how the debate on Wall Street is no longer about if crypto belongs in portfolios, but how much.
