Brazil’s Largest Private Bank Advises 3% Bitcoin Allocation For Clients

Core Viewpoint - Itaú Unibanco Holding SA recommends clients allocate up to 3% of their portfolios to Bitcoin as a hedge against the depreciation of the Brazilian real and to capture returns uncorrelated with domestic economic cycles [1][2][3]. Group 1: Investment Strategy - The bank suggests a Bitcoin allocation of 1% to 3% to enhance portfolio diversification without significantly increasing overall risk [2][3]. - Itaú emphasizes that Bitcoin should not be a core holding but rather a complementary asset tailored to an investor's risk profile [2][3]. Group 2: Market Context - Analysts at Itaú highlight the dual challenges of global price uncertainty and domestic currency fluctuations, necessitating a new approach to portfolio construction [2][3]. - The bank points out the relatively low correlation between Bitcoin and traditional asset classes, which can provide partial protection against currency depreciation [3][4]. Group 3: Long-term Perspective - The approach to Bitcoin investment requires moderation, discipline, and a long-term horizon, avoiding reactions to short-term price fluctuations [4][5]. - Itaú's recommendation aligns with global guidance, positioning it similarly to major US banks that suggest allocations of up to 4% for their clients [5][6]. Group 4: Asset Characteristics - The bank characterizes Bitcoin as a hybrid asset, combining high-risk elements with the qualities of a global store of value, offering resilience that fixed income cannot guarantee [6].