The financial landscape is rapidly evolving, and institutions like Itaú Asset Management are taking note of innovative assets. In its recent report, Brazil’s largest private bank has suggested allocating between 1% and 3% of investment portfolios to Bitcoin starting in 2026. This strategic move presents Bitcoin not as a primary investment but as a complementary asset to diversify risk.

Strategic Recommendations for Bitcoin Investment

Itaú’s guideline highlights Bitcoin’s unique low correlation with traditional assets and the potential currency risks that local investors have faced. In response to increasing market interest, Itaú has established a dedicated cryptocurrency division. This initiative, spearheaded by former Hashdex executive João Marco Braga da Cunha, aims to streamline access to regulated crypto products for its clients.

Crypto Access through Established Channels

Brazilian investors can now invest in Bitcoin via Itaú’s offerings, including the IT Now Bloomberg Galaxy Bitcoin ETF. This product, trading under the ticker BITI11 since November 10, 2022, presents a reliable option for investors seeking exposure to Bitcoin within the local market. Additionally, it complements other investment vehicles that provide similar crypto exposure.

Growing but Cautious Crypto Engagement

Itaú’s crypto offering currently manages approximately R$850 million in various funds and ETFs. While this figure may seem modest against the bank’s total assets exceeding R$1 trillion, it emphasizes the bank’s preparedness to delve into the cryptocurrency realm. This proactive approach indicates a willingness to adapt to evolving market demands.

Navigating Market Realities

As Itaú introduces these guidelines, they emerge during a turbulent year for Brazilian investors, who have experienced significant fluctuations in currency values. This context prompts the proposed allocation of 1% to 3%—providing a reasonable safeguard against local currency volatility without dismantling traditional stock or bond investments. The bank emphasizes a long-term investment perspective rather than a fleeting transaction.

Implications for Everyday Investors

For the average investor, the takeaway is clear: engage with cryptocurrencies judiciously. A 1% allocation might not significantly shift the balance of a well-diversified portfolio, while a 3% stake would fit within many investment strategies’ “satellite” category. As demand continues to rise, Itaú is expected to expand its crypto offerings, ranging from lower-risk products to more aggressive investment vehicles.

Image credit: La Nación; Chart credit: TradingView