Morgan Stanley Endorses Bitcoin as ‘Digital Gold’ with Fresh Allocation Playbook

Morgan Stanley recommends up to 4% Bitcoin allocation in high risk “Opportunistic Growth” portfolios.

Bitwise CEO says guidance reaches 16,000 advisors overseeing $2 trillion in client wealth.

Bitcoin hit $125K as exchange balances fell to six year lows, signaling tightening supply.

Morgan Stanley has formally introduced crypto into its portfolio guidance, a major policy shift among traditional financial institutions. The bank’s Global Investment Committee (GIC) issued updated recommendations advising financial advisors on how to include bitcoin within multi asset strategies. According to the guidelines, bitcoin qualifies as a “scarce asset, akin to digital gold,” placing it in the same category as long-term value hedges.

Allocation Framework Targets Growth Portfolios

The report proposes up to a 4% Bitcoin allocation within “Opportunistic Growth” portfolios structured for higher risk exposure. Notably, “Balanced Growth” plans receive a softer cap of 2%, offering room for moderate positioning

However, frameworks focused on income and capital preservation retain a zero allocation stance. Morgan Stanley analysts warned that crypto assets could display stronger correlations with broader markets during periods of financial stress, despite recent declines in volatility.

Institutional Reach Expands Through Advisor Networks

Bitwise CEO Hunter Horsley said the guidance carries weight, noting that it reaches roughly 16,000 advisors managing $2 trillion in client wealth. His remarks point to a structural shift in how financial professionals treat digital assets within regulated channels

Moreover, Bitcoin’s growing presence in exchange traded funds and corporate balance sheets continues to support this transition. The narrative now extends beyond speculation, moving toward formal classification within long term allocation models.

Tight Supply Conditions

Bitcoin recently printed a new all-time high above $125,000, according to Glassnode data. Exchange-held balances also fell to a six-year low, indicating reduced liquid supply across trading platforms

That drop aligns with ongoing accumulation from institutional products and treasury adoption. Meanwhile, the rally coincided with a U.S. government shutdown and broader movement into hedge assets. Analysts at The Kobeissi Letter said a rush into stores of value is underway as inflation rises and labor conditions soften.

Morgan Stanley’s framework appeared during this backdrop, supporting Bitcoin’s shifting position within global portfolios. Its classification as digital gold places it alongside metals rather than speculative technology, narrowing the gap between legacy hedges and emerging instruments.

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