What happened?
Morgan Stanley’s Global Investment Committee recommended clients consider a small crypto allocation of about 2% to 4% depending on risk tolerance. The committee published a special report telling advisors they can flexibly include crypto in multiasset portfolios while keeping exposures modest and rebalancing regularly. The move coincides with Bitcoin’s rally and plans to offer crypto trading to E-Trade clients, signaling a cautious but clearer shift into digital assets.
Who does this affect?
This guidance directly impacts Morgan Stanley’s 16,000 financial advisors and the roughly $2 trillion in client assets they manage. It’s especially relevant to younger investors pushing for crypto exposure, as well as clients with different goals—from wealth conservation (0%) to opportunistic growth (up to 4%). It also matters to institutional players and future E-Trade users who may gain easier, regulated access to crypto trading and related products.
Why does this matter?
A major Wall Street endorsement can legitimize crypto and draw more mainstream money into the market. Greater access and tightening exchange supplies could fuel price appreciation and change liquidity dynamics, especially if inflows concentrate through regulated channels and ETPs. At the same time, the small recommended caps and rebalancing advice show firms expect volatility, so gains may come with concentrated risks that investors need to manage.