Brazil's Top Asset Manager Urges Investors: Allocate Up to 3% in Bitcoin to Shield Against Currency and Market Volatility

Brazil's largest privately-owned asset manager, Itaú Asset Management, has made a significant recommendation for investors: allocate 1% to 3% of portfolios to Bitcoin (BTC) as a strategic hedge. This advice aligns with global trends, as major players like BlackRock and Bank of America have also suggested small allocations to the cryptocurrency.

In a year-end note, Renato Eid, head of beta strategies and responsible investment at Itaú, highlighted Bitcoin's lack of correlation with traditional local assets, making it an effective diversification tool. He emphasized a measured approach, not making crypto the core of a portfolio but using it as a complementary asset to absorb shocks from currency depreciation and global volatility.

Eid warned against market timing and advocated for a disciplined, long-term mindset. He suggested setting a strategic allocation, such as 1%–3%, maintaining a long-term horizon, and resisting short-term noise. This strategy can act as a partial hedge and provide access to global returns, especially as traditional asset correlations become less reliable.

For Brazilian investors, the ride has been bumpy due to currency fluctuations. Products like BITI11, a bitcoin ETF traded in Brazil, saw performance affected by the weakening fiat currency. However, Bitcoin's global nature offered some insulation during periods of stress, such as late 2024.

This recommendation underscores Bitcoin's growing acceptance as a legitimate asset class for portfolio diversification, backed by institutional support and its potential to mitigate risks in volatile markets.