Bank of America is directing its wealth management clients to consider cryptocurrency allocations for the first time, ending restrictions that prevented more than 15,000 advisers from recommending digital assets and completing a sweeping institutional embrace that now spans Wall Street's largest firms.
The nation's second-largest bank told clients they should allocate between 1% and 4% of portfolios to cryptocurrency through regulated investment vehicles, marking the final major holdout among traditional financial institutions to formalize crypto guidance.
The shift grants access for clients across Merrill, Bank of America Private Bank and Merrill Edge platforms, with coverage beginning Jan. 5 for four Bitcoin exchange-traded funds.
The development comes as every major Wall Street wealth manager has now established formal allocation frameworks for digital assets, transforming what was once considered a speculative outlier into a standard portfolio component backed by trillions in institutional capital.
What Happened
Bank of America's chief investment office will provide research coverage on four Bitcoin ETFs starting Jan. 5: the Bitwise Bitcoin ETF, Fidelity's Wise Origin Bitcoin Fund, Grayscale's Bitcoin Mini Trust and BlackRock's iShares Bitcoin Trust. The bank's network of over 15,000 wealth advisers can now proactively recommend cryptocurrency investments rather than waiting for clients to specifically request access.
"For investors with a strong interest in thematic innovation and comfort with elevated volatility, a modest allocation of 1% to 4% in digital assets could be appropriate," said Chris Hyzy, chief investment officer at Bank of America Private Bank. "Our guidance emphasizes regulated vehicles, thoughtful allocation, and a clear understanding of both the opportunities and [risks].
The policy reverses Bank of America's previous stance, which restricted crypto products to clients who explicitly requested them. Nancy Fahmy, head of the bank's investment solutions group, said the update reflects growing client demand for digital asset access. Many wealthy clients had turned to platforms outside Bank of America to gain exposure to Bitcoin ETFs over the past year.
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The bank joins a unified Wall Street position on cryptocurrency allocations. Morgan Stanley's global investment committee suggested 2% to 4% of portfolios could be allocated to crypto in early October, characterizing it as a "speculative but increasingly popular asset class" that many investors will seek to explore.
BlackRock recommended a 1% to 2% Bitcoin allocation at the beginning of 2025, while Fidelity Investments suggested 2% to 5% in March 2024, with allocations up to 7.5% for investors age 30 and below. Even Vanguard, which previously blocked Bitcoin products entirely, reversed course this week and began allowing selected crypto ETFs and mutual funds on its platform, opening access for more than 50 million brokerage customers managing over $11 trillion.
The coordinated shift follows sustained client pressure and growing institutional acceptance of digital assets as portfolio diversifiers. Morgan Stanley, Charles Schwab, Fidelity and JPMorgan Chase already allow customers to invest in certain crypto ETFs, while several banks including Charles Schwab and regional lender PNC are expected to expand into direct crypto trading pending regulatory clarity.
Why It Matters
The institutional endorsement of cryptocurrency allocations represents a fundamental shift in how traditional finance views digital assets. Less than two years after spot Bitcoin ETFs launched in January 2024, every major Wall Street wealth manager has established formal frameworks recommending modest crypto exposure - a transformation that brings regulated investment vehicles to millions of clients who previously lacked structured access.
Bank of America's decision carries particular weight given the bank's conservative reputation and massive distribution network. With nearly $2.9 trillion in assets under management and thousands of advisers now empowered to recommend crypto products, the policy change opens institutional-grade Bitcoin exposure to a client base that had been effectively shut out of the market.
The unified guidance from competing institutions - ranging from 1% to 7.5% depending on risk tolerance and age - establishes parameters that treat crypto as a legitimate asset class requiring thoughtful allocation rather than prohibition. The recommendations emphasize regulated ETF wrappers over direct token ownership, providing custody safeguards and tax reporting that align with traditional investment practices.
However, the timing presents challenges. Bitcoin has declined roughly one-third from its October high above $126,000 to around $85,000 as of early December, leaving the cryptocurrency down approximately 10% year to date while the S&P 500 has gained over 15%. The divergence raises questions about whether institutional capital will flow into digital assets at current valuations or whether firms are establishing frameworks in anticipation of future appreciation.
The shift also reflects pragmatic business considerations beyond investment thesis. Banks risked losing high-net-worth clients to competitors offering crypto access, creating pressure to establish comparable services regardless of internal skepticism about digital asset fundamentals. With regulatory clarity improving under the current administration and client demand accelerating, the institutional adoption that once seemed years away has compressed into a unified Wall Street position over a matter of months.
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