A debate is emerging regarding appropriate Bitcoin allocation in investment portfolios. Coinbase CEO Brian Armstrong suggested investors should allocate at least 5% of their net worth to Bitcoin, while major financial institutions like Morgan Stanley and Bank of America recommend capping crypto exposure at around 4% or less, even for aggressive growth models. This difference highlights a fundamental disagreement on whether the 5% figure represents a risk ceiling or a minimum effective investment. Financial advisors are approaching Bitcoin with caution, primarily focusing on managing downside risk due to its volatility. Research from firms like Fidelity Institutional suggests allocations between 2% and 5%, with slightly higher allocations for younger investors. The industry consensus, as reflected in surveys, indicates that most client portfolios with crypto exposure allocate less than 5% to the asset.

A debate is emerging regarding appropriate Bitcoin allocation in investment portfolios. Coinbase CEO Brian Armstrong suggested investors should allocate at least 5% of their net worth to Bitcoin, while major financial institutions like Morgan Stanley and Bank of America recommend capping crypto exposure at around 4% or less, even for aggressive growth models. This difference highlights a fundamental disagreement on whether the 5% figure represents a risk ceiling or a minimum effective investment. Financial advisors are approaching Bitcoin with caution, primarily focusing on managing downside risk due to its volatility. Research from firms like Fidelity Institutional suggests allocations between 2% and 5%, with slightly higher allocations for younger investors. The industry consensus, as reflected in surveys, indicates that most client portfolios with crypto exposure allocate less than 5% to the asset.