Bank of America, Fidelity, Morgan Stanley Endorse 1–5% Bitcoin Stakes in Portfolios

Several major Wall Street institutions are now advising clients to include a modest allocation to Bitcoin within diversified portfolios.

According to a report by River, firms such as Fidelity Investments, Bank of America, and Morgan Stanley are recommending measured exposure to cryptocurrency. Most suggested allocations fall between 1% and 5% of total portfolio value, reflecting a cautious but deliberate embrace of digital assets.

Key Points

• Major firms, including Fidelity, Bank of America, and Morgan Stanley, are formally recommending small Bitcoin allocations in client portfolios.
• Suggested allocations generally range from 1% to 5%, reflecting cautious but deliberate adoption of cryptocurrency.
• Institutions are increasingly treating Bitcoin as a portfolio diversifier rather than purely speculative.

Institutional Allocation Strategies Expand

River reports that Fidelity is formally advising its wealth management clients to allocate between 2% and 5% of their portfolios to crypto, including Bitcoin. Bank of America recommends a slightly lower range of 1% to 4%, while Morgan Stanley suggests allocations of up to 4%.

Other asset managers are taking a more conservative approach. BlackRock recommends limiting exposure to between 1% and 2%. Meanwhile, WisdomTree and JPMorgan Chase advise allocations of up to 1%.

Collectively, these recommendations mark an important evolution in institutional thinking. Bitcoin is increasingly being treated as a portfolio diversifier rather than a purely speculative asset. By keeping allocations relatively small, institutions aim to capture potential long-term upside while maintaining prudent risk management.

Bitcoin Faces Heavy Selling Pressure

These allocation calls come amid a challenging period for the cryptocurrency market. Bitcoin reached a record high of $126,080 in October last year but has since declined by 47%. At the time of reporting, the asset was trading at $67,441, according to data from CoinGecko.

Despite the sharp correction, institutional commentary suggests that long-term conviction remains intact. Several major firms continue to publish bullish projections, reinforcing the view that short-term volatility has not undermined Bitcoin’s strategic relevance.

Long-Term Forecasts Reflect Strategic Confidence

In 2025, BlackRock CEO Larry Fink projected that Bitcoin could eventually reach $700,000 per coin, citing growing concerns about currency debasement and global financial instability. He argued that Bitcoin may serve as a hedge against structural weaknesses in traditional monetary systems.

Fidelity has outlined an even more ambitious scenario. In September 2021, the firm projected that Bitcoin could reach $1 billion per coin by 2038. At the time, Jurrien Timmer, Fidelity’s Director of Global Macro, supported the projection using stock-to-flow and demand-based valuation models.

JPMorgan analysts have also issued long-term projections, suggesting Bitcoin could eventually rise to $266,000. Their analysis focuses on Bitcoin’s potential to compete with gold as a store of value.

Comparing Bitcoin and Gold Dynamics

JPMorgan analysts note that gold has outperformed Bitcoin since last October, even as gold’s own volatility has increased. This combination has improved Bitcoin’s relative appeal on a volatility-adjusted basis.

They highlighted that the Bitcoin-to-gold volatility ratio has declined to approximately 1.5, a record low. This shift suggests Bitcoin may be becoming more competitive with gold in terms of risk-adjusted performance.

To reach $266,000, Bitcoin’s market capitalization would need to equal roughly $8 trillion in private-sector gold investment, excluding central bank holdings. JPMorgan stressed that such a target is unrealistic for the current year. However, the firm said it illustrates potential upside if market sentiment improves and Bitcoin regains favor as a hedge asset.

Overall, while price pressures persist, major financial institutions appear to be integrating Bitcoin into mainstream portfolio strategy. Their recommendations emphasize limited exposure, disciplined allocation, and long-term positioning rather than short-term speculation.

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