Brazil's largest bank is suggesting investors hold 1-3% of their portfolio in Bitcoin by 2026, emphasizing the potential for portfolio diversification and hedging against currency risks despite significant volatility.
Itaú Asset Management, the investment management arm of Brazil's largest private bank, Itaú Unibanco, has issued a bold recommendation, suggesting investors allocate between 1% and 3% of their portfolios to Bitcoin over the next year. This move reflects a shift in the perspective of traditional financial institutions towards digital assets.
In a newly published research note , Renato Eid from Itaú Asset argues that the global context of geopolitical tensions, shifting monetary policy, and persistent currency risks is reinforcing the argument for Bitcoin as a complementary asset. He describes Bitcoin as “an asset distinct from fixed income, traditional stocks, or domestic markets, with its own dynamics, its own yield potential, and, due to its global, decentralized nature, functions as a currency hedge.”
This recommendation comes as Bitcoin is expected to experience a volatile 2025. The asset started the year around $95,000, fell to nearly $80,000 during the tariff crisis, then surged to an All-Time-High of $125,000 before stabilizing around $95,000. For Brazilian investors, this volatility is even more pronounced due to the Brazilian real appreciating by approximately 15% this year, amplifying losses in local currency terms.
Low correlation creates an advantage for diversification.
Despite the volatility, Eid argues that a small and stable Bitcoin weighting could mitigate risks not hedged by traditional assets. Citing internal bank data, he noted that the correlation between BITI11 – Itaú’s locally listed Bitcoin ETF – and other major asset classes is low, thus reinforcing the basis for adding a modest BTC position to improve portfolio balance.
“By allocating approximately 1% to 3% of their portfolio to Bitcoin, investors are effectively leveraging an asset that creates diversification,” the bank emphasized. This recommendation aligns with a global trend as major financial institutions increasingly embrace Bitcoin as part of their long-term asset allocation strategies.
In September, Itaú Asset established an independent crypto asset division and appointed João Marco Braga da Cunha – a former Hashdex leader – as its head. This move expands on Itaú's existing portfolio of digital asset products, including Bitcoin ETFs and pension funds with crypto exposure.
The bank also plans to develop a broader product portfolio, ranging from fixed-income instruments to more volatile strategies such as Derivative and Staking.
