Brazil’s Largest Asset Manager Recommends Investors Put Up to 3% of their Money in Bitcoin to Hedge Against FX, Market Shocks

Itáu Asset Management, the largest private asset manager in Brazil, has advised investors to consider allocating between 1% and 3% of their investment portfolios to bitcoin. BTC$90,115.48.

In a recent year-end report, Renato Eid, who oversees beta strategies and responsible investments at Itáu Asset Management, highlighted that bitcoin’s distinct performance relative to traditional assets makes it an effective tool for diversification.

This recommendation aligns with the bitcoin allocation strategies suggested by various leading asset managers. Recently, Bank of America authorized its wealth advisors to propose a BTC allocation of up to 4%, while BlackRock has indicated a 2% allocation.

According to Eid, the emphasis should be on a balanced approach, integrating cryptocurrencies as supplementary assets without making them the focal point of investment strategy. Such an approach helps insulate against risks associated with currency devaluation and global market volatility.

“The goal is not to center a portfolio around cryptoassets but to treat them as a helpful addition sized correctly according to the investor’s risk assessment,” Eid explained.

This past year, bitcoin reached an all-time peak of nearly $125,000 before retreating to around $90,000. For domestic investors, this journey was further complicated by shifts in the currency valuation.

In Brazil, products like BITI11, a bitcoin ETF, experienced performance fluctuations in reais due to the depreciating fiat currency. However, during turbulent periods, as seen in late 2024, bitcoin’s global nature offered some level of protection.

Eid cautioned against attempting to time the market, urging investors to adopt a disciplined, long-term perspective. He believes that consistent, modest exposure to bitcoin can serve as a hedge and provide opportunities for global returns, particularly as the correlations between traditional assets become more unpredictable.

“It’s important to practice moderation and discipline: establish a strategic portion (for instance, 1%-3% of the entire portfolio), maintain a long-term outlook, and avoid reacting impulsively to short-term fluctuations,” Eid advised.