Itaú Recommends 1-3% Bitcoin Allocation for Diversification

Brazil's largest privately owned asset manager, Itaú Asset Management, has recommended that investors allocate 1 to 3 percent of their portfolios to bitcoin as a diversification tool for the coming year. The guidance, outlined in a recent year-end research note by Renato Eid, head of beta strategies and responsible investment at the firm, highlights bitcoin's low correlation with traditional assets amid ongoing global and local economic uncertainties.

The recommendation positions bitcoin not as a core holding but as a complementary asset to enhance portfolio resilience. Eid argued that bitcoin's distinct dynamics, separate from equities, fixed income or domestic markets, allow it to provide partial protection against currency depreciation and volatility. "The idea is not to make crypto assets the core of the portfolio but to include them as a complementary component sized appropriately to the investor's risk profile," Eid wrote. He emphasized a disciplined, long-term approach, advising against market timing and suggesting steady exposure to capture uncorrelated returns while mitigating short-term fluctuations.

This advice comes after a volatile year for bitcoin, which started...