Brazil’s Biggest Bank Recommends Bitcoin Allocation

In a historic move, Brazil’s Itaú Asset, the country’s largest asset manager, has recommended its clients to change their asset allocation strategy to include Bitcoin, the world’s largest crypto asset. Itaú Asset is the largest asset manager in Brazil, handling over 185 billion US dollars worth of assets.

In a landmark move, the asset manager has requested its clients to strategically allocate 1% to 3% of their portfolio to Bitcoin. With this recommendation, it has become clear that the big players of the financial industry are welcoming digital assets into everyday financial services with open arms.

Bitcoin As A Modern Investment Strategy

Itaú Asset has given clear reasons as to why it has made this rather unconventional recommendation. These reasons have been highlighted by Wu Blockchain as well. The primary reason for Itaú Asset to make the said recommendation is to place Bitcoin as a strategic hedge asset. This hedge will help protect Itaú Asset’s clients against local currency devaluation and geopolitical tensions.

Itaú Asset is calling the recommendation an insurance against the said problems, as Brazil has historically witnessed earlier currency devaluation issues. This recommendation has thus far received much appreciation from several clients as they are planning on taking Itaú Asset’s advice on portfolio management.

Portfolio diversification, inflation hedge, and strategic positioning are three core benefits that clients will receive by following this recommendation, according to Itaú Asset. By having low correlation with traditional assets, this portfolio diversification will reduce overall volatility. As far as the inflation hedge goes, the status of Bitcoin acts as a security since it is considered to be a digital equivalent of gold. By adding 1% to 3% Bitcoin in the portfolio, clients will be able to gain exposure to the growing domain of digital assets, but with controlled risk.

Itaú Asset’s Idea Of Approach

The recommendation put forth by Itaú Asset is a smart and rather innovative move, as it gives exposure to digital assets, which will give significant returns while the restricted amount of 1% to 3% positions clients at a safe zone by avoiding any catastrophic loss. The highlight of the recommendation is obviously the portion of allowance for Bitcoin. This is the same for both retail and institutional investors.

Itaú Asset adds further points of knowledge in this recommendation, including telling clients to accumulate the said portion through a dollar cost averaging strategy to avoid any mistakes that may arise from improperly timing the purchase.

Global Crypto Adoption Grows

With the announcement from Itaú Asset, the global adoption of crypto assets must be gaining traction. With major entities of the traditional financial services embracing crypto so openly, the future of regulated digital assets seems bright. It is not just Brazil that has plans for Bitcoin and other digital assets; many countries all over the world are in a race to safely integrate crypto with the everyday lives of their citizens.

This transition towards a healthy adoption of digital assets in a regulated and safe environment carries paramount importance. Since digital assets have long been considered risky and illegal, such regulatory initiatives are clearing the fog surrounding digital assets.

With more efforts to make the crypto ecosystem go mainstream come several challenges. The inherent decentralized nature of cryptocurrencies does pose the question of whether centralized agencies and institutions can practically incorporate digital assets into their ecosystem. However, initiatives like the one made by Itaú Asset are proof that digital assets, even though decentralized, can coexist with the elements of traditional finance.

Also Read: Florida AG Confirms $1.5M Crypto Seizure in Citrus County Fraud