With bitcoin down to around $90,000, should you rethink how much crypto to own? Here's what experts say.

By Weston Blasi Financial institutions like BlackRock and Fidelity are now giving crypto recommendations too Bitcoin recently entered a bear market. After touching record highs earlier this year, bitcoin and many major cryptocurrencies fell into a bear market in November. Prices of bitcoin (BTCUSD) were at $90,000, and prices for ether (ETHUSD) were hovering just under $3,200 as of Saturday. This drop may have investors wondering if they should rethink how much of their individual portfolios should be in the digital assets. Edward Hadad, a certified financial planner at Financial Asset Management Corp., recommends that speculative assets like crypto or gold should not exceed more than 5% of a person's portfolio, regardless of market conditions. "Our philosophy is to invest in a well-diversified portfolio of stock and bond funds and ETFs, which does not include direct positions in crypto, gold or individual stocks," he said. For clients who want to own these asset classes and include a portion for crypto, "it's a conversation, but we strongly recommend in most cases to limit it to 1%-5% of their total assets," Hadad said. He adds that his recommendations don't change with price swings of an asset like bitcoin, which is already a volatile asset. "There's going to be some individuality to each portfolio," Clifford Cornell, a certified financial planner at Bone Fide Wealth, told MarketWatch about the recent market shifts in bitcoin, as well as gold. "Any changes for a portfolio, I always try to figure out if FOMO (fear of missing out) is the main driver." Cornell suggests that instead of a blanket recommendation for those interested in assets outside of stocks and bonds, they consider a separate "opportunity portfolio" for growth investing in these alternate assets, which are not dependent on market swings. "We never shy away from allowing clients [to invest] if they feel strongly about bitcoin, gold or an individual stock," he said. Cornell also noted that any alternate asset investment that makes up 15% of a person's portfolio is too "hefty." In a shift, some major financial services companies are now giving recommendations on cryptocurrency allocation, reflecting growing client demand and the mainstreaming of crypto through regulated ETFs and online trading platforms. They, too, are generally suggesting a conservative approach for investors. On Dec. 2, Bank of America (BAC) started recommending a 1% to 4% crypto allocation for its wealth management clients, marking a significant shift in how one of the country's largest financial institutions approaches crypto exposure, according to Yahoo Finance. The guidance applies across Merrill, Bank of America Private Bank and Merrill Edge. "Our guidance emphasizes regulated vehicles, thoughtful allocation, and a clear understanding of both the opportunities and risks," Chris Hyzy, chief investment officer at Bank of America Private Bank, said in a statement. Morgan Stanley's (MS) Global Investment Committee, for example, issued a paper in October recommending a maximum crypto allocation of 4%. The committee characterized the asset class as "speculative and increasingly popular," comparing bitcoin specifically to "digital gold" due to its scarcity. Similarly, BlackRock's (BLK) Investment Institute suggested a 1% to 2% allocation to bitcoin for 2024. Writers from Fidelity's investment blog offered a slightly higher range, suggesting that a 2% to 5% portfolio allocation might be appropriate for bitcoin, and potentially up to 7.5% for younger investors. Furthermore, Morgan Stanley is expanding its services to allow retirement accounts to hold crypto for the first time. It will use automated monitoring processes to help ensure clients don't become overly exposed to the volatile digital asset class. However, the financial planners who spoke to MarketWatch regarding this development were discussing potential crypto exposure in traditional brokerage accounts, not retirement accounts. Read on: Ray Dalio wants investors to have 15% of their portfolios in gold. Here's what others think of his advice. -Weston Blasi This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal. (END) Dow Jones Newswires 12-13-25 1100ET