Brazil’s leading bank says savers should keep up to 3% of their money in Bitcoin

The asset management arm of the Brazilian megabank Itaú has recommended that savers keep between 1% and 3% of their wealth in Bitcoin.

The recommendation comes almost exactly two years after its banking arm Itaú Unibanco began offering its customers Bitcoin and Ethereum trading options, and three years after it launched its first Bitcoin exchange-traded fund, or ETF.

Renato Eid, Itaú Asset Management’s head of beta strategies and responsible investment, explained, in a column on the Itaú investment portal, that Bitcoin is “an asset distinct from fixed income, traditional stocks, or domestic markets.”

“Bitcoin has its own dynamics and return potential,” Eid wrote. “And – because of its global and decentralized nature – it has a currency hedging function.”

Itaú Unibanco has a market cap of $78.20 billion and holds assets worth $500 billion, making it one of Latin America’s biggest lenders.

While it was careful to underline the need for “moderation and discipline” in Bitcoin investment, the bank appears to be becoming increasingly bullish on all things Bitcoin-related.

Ignore short-term volatility, says Itaú

Eid said that investors should be sure to “define” the size of investment before buying Bitcoin or shares in the financial group’s own Bitcoin ETF.

“Decide on the size of [your] strategic allocation, for example, 1%–3% of [your] total portfolio, maintain a long-term outlook, and resist the temptation to react to short-term fluctuations,” he wrote.

“In a world where economic cycles are shortening, external shocks are on the rise, and traditional correlations between assets may break down, Bitcoin, while volatile, can represent an asset class with a distinctive pattern of behaviour,” Eid said.

Eid added that Bitcoin was unique among asset classes, due to its “hybrid character” that is “part high-risk and part global store of value.”

This, he concluded, makes Bitcoin “an interesting portfolio addition for those seeking resilience and international opportunity.”

Itaú regularly vies for market dominance with the neobank Nubank, which has taken an even more bullish stance on crypto and Bitcoin in recent years.

In May 2022, Nubank became one of the first major Latin American firms to adopt Bitcoin treasury business models, unveiling plans to convert 1% of its net assets to Bitcoin.

Tim Alper is a news correspondent at DL News. Got a tip? Email at tdalper@dlnews.com.