In a major shift for traditional finance, Bank of America is now recommending that its wealth‑management clients allocate between 1% and 4% of their investment portfolios to cryptocurrencies.
The guidance — which applies to clients using its Merrill, Bank of America Private Bank, and Merrill Edge platforms — marks a clear endorsement of digital assets as a legitimate part of a diversified portfolio.
“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.
Key Takeaways
- Bank of America will allow wealth management clients to allocate 1–4% of their portfolios to cryptocurrencies.
- The bank’s advisers will focus on four major Bitcoin ETFs: Bitwise, Fidelity, Grayscale, and BlackRock.
- The recommended allocation is targeted at investors comfortable with volatility and seeking thematic growth.
- This move aligns BofA with other major institutions embracing crypto, such as BlackRock, Morgan Stanley, and Vanguard.
Why This Matters
This change represents a major step for one of the United States’ largest banks. Until now, BofA allowed clients to buy crypto — but only if they requested it and their portfolio managers agreed. The new policy flips that script: more than 15,000 wealth advisers affiliated with BofA can now proactively recommend institutional‑grade cryptocurrency exposure.
The bank will begin covering four major spot Bitcoin exchange‑traded funds (ETFs) starting January 5, 2026. These are:
- Bitwise Bitcoin ETF (BITB)
- Fidelity Wise Origin Bitcoin Fund (FBTC)
- Grayscale Bitcoin Mini Trust (BTC)
- BlackRock iShares Bitcoin Trust (IBIT)
By choosing regulated ETFs rather than direct crypto holdings, BofA is effectively encouraging a structured, compliant, and professionally managed form of cryptocurrency exposure.
The Strategy Behind 1–4%
The 1–4% range is deliberately modest. According to Hyzy’s statement, the allocation is targeted at investors who are comfortable with volatility and seek exposure to “thematic innovation.”
For conservative clients with lower risk tolerance, the lower end of the range likely makes sense — offering minimal but meaningful exposure to a high‑growth asset class.
For more aggressive investors — those who are open to higher risk in exchange for potential long-term gains — the 3–4% allocation could serve as a small but significant growth driver.
Importantly, this isn’t a blanket recommendation for all clients. The decision hinges on individual risk profiles and willingness to accept crypto’s characteristic volatility.
What This Signals for the Wider Financial Industry
The move by Bank of America reflects a broader trend among major financial institutions increasingly embracing digital assets.
The inclusion of Bitcoin ETFs from major asset managers — such as BlackRock, Fidelity, Bitwise, and Grayscale Investments — gives clients regulated, transparent and professionally managed exposure.
The fact that BofA is now comfortable recommending crypto suggests growing institutional confidence in digital‑asset infrastructure and regulatory clarity.
For clients who were previously hesitant or unable to access crypto through their banks, this change opens up new opportunities — under the oversight of experienced advisors, not just self‑directed investing platforms.
What Investors Should Know
While this development is encouraging for crypto adoption, there are important caveats:
- Digital assets remain volatile. Even with ETFs, price swings can be sharp and unpredictable — not ideal for investors needing stability or short‑term liquidity.
- A small allocation (1–4%) may not move the needle much for large portfolios. But it does provide a hedge or growth tilt — especially if crypto appreciates over a longer horizon.
- Regulatory regimes and global macroeconomic factors remain uncertain, which could affect both crypto and traditional asset classes over time.
Final Thoughts
Bank of America’s decision to recommend cryptocurrency exposure to its wealth clients is an important milestone in traditional finance’s acceptance of digital assets. By endorsing a modest 1–4% allocation through regulated Bitcoin ETFs, the bank is signaling a new level of institutional legitimacy for crypto — and potentially paving the way for broader adoption across the sector.
For investors who are informed, comfortable with volatility, and looking for diversification beyond stocks and bonds, this might be the moment to consider whether a small crypto allocation makes sense.
