Wall Street Firms Recommend Up to 5% Bitcoin Allocations

Morgan Stanley and Merrill Lynch now recommend up to 5% Bitcoin allocations for client portfolios, according to analysts who spoke at a VettaFi webinar sponsored by CoinShares. The comments came as the Depository Trust & Clearing Corporation announced a pilot to trade tokenized securities and as stablecoin market capitalization approaches $300 billion.

Matthew Kimmell, digital asset research analyst at CoinShares, reported that stablecoins grew from about $25 billion five years ago to roughly $300 billion today. He also said tokenized assets expanded from about $6 billion in early 2025 to near $30 billion over the following 16 months. Kimmell added that stablecoin issuers are now among the top 15 global holders of U.S. Treasury debt.

The DTCC plans to begin a tokenized‑securities trading pilot in July, with full deployment targeted for October. Participants in the program include major custodians and banks such as BlackRock, JPMorgan, Goldman Sachs and Nasdaq. Kimmell described the list of participants as evidence that large institutions are already active in tokenized markets.

Panelists pointed to institutional demand visible in quarterly 13F filings and continuing inflows into Bitcoin exchange‑traded funds. Allocations are rising among endowments, sovereign wealth funds, registered investment advisors and hedge funds, the speakers said.

Regulatory developments were addressed during the session. The Genius Act, enacted last summer, established rules and reserve requirements for stablecoin issuers. The CLARITY Act, a market‑structure bill that would assign oversight to either the Securities and Exchange Commission or the Commodity Futures Trading Commission, moved closer to a Senate floor vote after negotiators reached a compromise on yield provisions. Kimmell said the agreement resolved a key dispute between banking industry lobbyists and crypto firms.

Advisors are shifting how they evaluate Bitcoin. Calvin Tintle, senior manager of national accounts and distribution at CoinShares, said, “It’s less about hype and more about fundamentals.” He emphasized factors such as store of value, transferability and decentralization when assessing how Bitcoin fits in diversified portfolios and cited the asset’s price behavior during the recent Iran conflict as an example of trading driven by fundamentals.

A live webinar poll found 47% of attendees watching from the sidelines, 20% actively investing and the remainder researching without allocating. When asked which instrument would have the largest impact on traditional finance over the next three years, 42% selected tokenized traditional assets, 33% chose stablecoins and 20% picked Bitcoin.

Industry executives and asset managers are investing in infrastructure to support instant settlement and 24/7 trading. Panelists said tokenization pilots are expected to broaden the set of tradable instruments and integrate on‑chain settlement with institutional custody and compliance.