Institutional portfolios seek expansion through Bitcoin: the stance of leading financiers

Leading financial experts are increasingly considering Bitcoin a reliable asset for investors seeking to improve the returns of their portfolios. At the forefront of this movement is Ark Invest CEO Cathie Wood, who this year has drawn attention to the unique role of cryptocurrency in asset management strategies. Her position is supported by a range of specific data showing the distinctive nature of this asset compared to traditional investments.

Low Correlation as an Advantage for Portfolios

The central idea advocated by Wood is based on analysis of correlation coefficients. According to Ark Invest, Bitcoin demonstrates significantly weaker price correlations with major asset classes compared to how these assets relate to each other. Specifically: Bitcoin’s correlation with the S&P 500 index is 0.28, while the S&P 500 itself has a correlation of 0.79 with real estate trusts. This means Bitcoin moves more independently, creating genuine diversification value.

“Bitcoin should serve as a good source of diversification for asset managers seeking higher risk-adjusted returns,” Wood noted in her 2026 forecast. Since 2020, this asset has consistently shown positive results in expanding portfolios, demonstrating weaker correlations not only with stocks and bonds but also with gold.

Consensus Among Major Financial Institutions

Wood’s stance aligns with recommendations from leading global institutions. Morgan Stanley suggests an “opportunistic” allocation of up to 4% in Bitcoin, recognized by institutional portfolios as a cautious but justified allocation. Similarly, Bank of America has authorized wealth management advisors to recommend clients similar allocation sizes.

CF Benchmarks also recognized Bitcoin as a core component of a portfolio, indicating that a conservative allocation could enhance efficiency through higher yields without excessive risk. On a global level, even Itaú Asset Management — Brazil’s largest asset manager — has begun offering small Bitcoin allocations as insurance against currency and market fluctuations.

Counterpoints and Challenges

However, the picture is not entirely straightforward. Jefferies strategist Christopher Wood has radically changed his stance on Bitcoin in his model portfolio, replacing his previous call for a 10% allocation with a recommendation for gold instead. His concern relates to advances in quantum computing, which could potentially weaken the cryptographic security of the Bitcoin blockchain in the long term.

Thus, investors looking to expand their portfolios through digital assets should consider both the advantages of low correlation and the associated risks. The consensus among leading institutions remains largely positive regarding moderate allocations, but diversification requires ongoing monitoring of technological developments and market conditions.