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Bank of America Embraces Bitcoin ETFs, Recommends Up to 4% Crypto Allocation

MarketDash Editorial Team
5 days ago
After years of restricting its advisers from recommending crypto, Bank of America has reversed course, launching Bitcoin ETF coverage and formally endorsing a 1-4% allocation for wealth management clients starting January 5.

In what marks a significant policy shift, Bank of America Corp. (BAC) announced Tuesday that it will formally recommend a 1% to 4% cryptocurrency allocation for wealth management clients and launch research coverage of multiple Bitcoin (BTC) ETFs beginning January 5.

This is a big deal. For years, Bank of America maintained strict policies that prevented more than 15,000 advisers across Merrill, Private Bank, and Merrill Edge from proactively recommending digital asset products. Clients could access crypto if they specifically requested it, but advisers couldn't lead the conversation. That changes now.

The ETF Lineup: Four Funds Get the Green Light

Starting January 5, the bank's chief investment office will provide research coverage on four spot Bitcoin ETFs: the Bitwise Bitcoin ETF (BITB), the Fidelity Wise Origin Bitcoin Fund (FBTC), the Grayscale Bitcoin Mini Trust (BTCM), and the BlackRock iShares Bitcoin Trust (IBIT).

The move puts Bank of America in line with competitors who've been expanding access to regulated cryptocurrency vehicles. In a statement, private bank CIO Chris Hyzy said a modest digital asset allocation "may be appropriate" for investors who can handle higher volatility and are interested in thematic innovation. The bank's guidance, he emphasized, will focus on regulated instruments and portfolio diversification.

Following the Industry Playbook

Bank of America isn't exactly breaking new ground here—it's catching up. Morgan Stanley (MS) suggested a 2% to 4% range for "opportunistic portfolios" back in October. BlackRock (BLK) has backed a 1% to 2% Bitcoin allocation, while Fidelity has long supported a 2% to 5% range, with higher allowances for younger clients.

The endorsement arrives amid a broader industry shift toward regulated exposure. Even Vanguard, long a holdout, recently began allowing select cryptocurrency ETFs and mutual funds on its platform. Other major financial institutions including JPMorgan Chase & Co. (JPM), Charles Schwab Corp. (SCHW), and SoFi Technologies Inc. (SOFI) have expanded crypto access despite lingering regulatory uncertainty.

The Regulatory Backdrop

The timing isn't coincidental. The expansion of crypto access across major banks coincides with the Trump administration's deregulatory push. Federal agencies have rolled back several constraints that previously limited bank involvement in custody, settlement, and tokenized markets. The new stance has strengthened demand among advisers and retail clients seeking regulated exposure.

Still, large banks continue to wait for a comprehensive Congressional framework establishing uniform oversight of digital assets. Lawmakers are considering legislation that would clarify how federal agencies supervise trading, custody, and tokenized assets.

Bitcoin's Rocky Ride Hasn't Dampened Institutional Enthusiasm

Here's the interesting part: Bitcoin has fallen roughly 30% from its record highs above $126,000 in October and is down about 10% year-to-date, even as the S&P 500 (SPY) has gained more than 15%. Yet despite this retreat, long-term institutional forecasts remain surprisingly upbeat.

JPMorgan reaffirmed a $170,000 upside target last month, while Standard Chartered analysts have maintained a $200,000 year-end projection. Wealth managers argue that a 1% to 4% allocation can provide long-term diversification with controlled risk.

Nancy Fahmy, who leads Bank of America's investment solutions group, framed the shift as a response to "growing client demand for access to digital assets." Translation: advisers were getting tired of telling clients no.

Technical Picture: Testing Critical Levels

Bitcoin price is up 5.5% today, holding near $91,000 as it tests the upper descending trendline of a major triangle formation. A breakout above that line would open the path toward the $94,000 to $96,000 region, where the 200-day EMA sits as a major resistance cluster. Traders consider that area the level that must be reclaimed to reset broader momentum.

If the test fails, the lower boundary remains well-defined. Buyers have repeatedly defended the $84,000 to $86,000 zone, creating a support band that has already produced multiple rebounds. Losing that floor would signal a meaningful deterioration in near-term structure.

After several weeks of steady outflows, Bitcoin recorded an estimated $150 million in positive net inflows, signaling fresh capital entering the market.

What This Means for the Crypto Market

Bank of America's policy reversal represents more than just another institution dipping its toe into crypto waters. With over 15,000 advisers now empowered to recommend Bitcoin ETFs, we're talking about potential access to trillions of dollars in client assets. Even if only a fraction of those clients allocate the recommended 1% to 4%, the capital flow could be substantial.

The move also signals growing confidence in the regulatory framework around spot Bitcoin ETFs. These products launched just over a year ago, and major institutions are now comfortable not just offering access, but actively recommending allocation. That's a meaningful vote of confidence in the maturation of crypto as an asset class.

Whether Bitcoin can reclaim its previous highs remains to be seen, but with Bank of America joining the institutional embrace, the infrastructure for mainstream adoption continues to solidify.

Back to News

Bank of America Embraces Bitcoin ETFs, Recommends Up to 4% Crypto Allocation

MarketDash Editorial Team
5 days ago
After years of restricting its advisers from recommending crypto, Bank of America has reversed course, launching Bitcoin ETF coverage and formally endorsing a 1-4% allocation for wealth management clients starting January 5.

In what marks a significant policy shift, Bank of America Corp. (BAC) announced Tuesday that it will formally recommend a 1% to 4% cryptocurrency allocation for wealth management clients and launch research coverage of multiple Bitcoin (BTC) ETFs beginning January 5.

This is a big deal. For years, Bank of America maintained strict policies that prevented more than 15,000 advisers across Merrill, Private Bank, and Merrill Edge from proactively recommending digital asset products. Clients could access crypto if they specifically requested it, but advisers couldn't lead the conversation. That changes now.

The ETF Lineup: Four Funds Get the Green Light

Starting January 5, the bank's chief investment office will provide research coverage on four spot Bitcoin ETFs: the Bitwise Bitcoin ETF (BITB), the Fidelity Wise Origin Bitcoin Fund (FBTC), the Grayscale Bitcoin Mini Trust (BTCM), and the BlackRock iShares Bitcoin Trust (IBIT).

The move puts Bank of America in line with competitors who've been expanding access to regulated cryptocurrency vehicles. In a statement, private bank CIO Chris Hyzy said a modest digital asset allocation "may be appropriate" for investors who can handle higher volatility and are interested in thematic innovation. The bank's guidance, he emphasized, will focus on regulated instruments and portfolio diversification.

Following the Industry Playbook

Bank of America isn't exactly breaking new ground here—it's catching up. Morgan Stanley (MS) suggested a 2% to 4% range for "opportunistic portfolios" back in October. BlackRock (BLK) has backed a 1% to 2% Bitcoin allocation, while Fidelity has long supported a 2% to 5% range, with higher allowances for younger clients.

The endorsement arrives amid a broader industry shift toward regulated exposure. Even Vanguard, long a holdout, recently began allowing select cryptocurrency ETFs and mutual funds on its platform. Other major financial institutions including JPMorgan Chase & Co. (JPM), Charles Schwab Corp. (SCHW), and SoFi Technologies Inc. (SOFI) have expanded crypto access despite lingering regulatory uncertainty.

The Regulatory Backdrop

The timing isn't coincidental. The expansion of crypto access across major banks coincides with the Trump administration's deregulatory push. Federal agencies have rolled back several constraints that previously limited bank involvement in custody, settlement, and tokenized markets. The new stance has strengthened demand among advisers and retail clients seeking regulated exposure.

Still, large banks continue to wait for a comprehensive Congressional framework establishing uniform oversight of digital assets. Lawmakers are considering legislation that would clarify how federal agencies supervise trading, custody, and tokenized assets.

Bitcoin's Rocky Ride Hasn't Dampened Institutional Enthusiasm

Here's the interesting part: Bitcoin has fallen roughly 30% from its record highs above $126,000 in October and is down about 10% year-to-date, even as the S&P 500 (SPY) has gained more than 15%. Yet despite this retreat, long-term institutional forecasts remain surprisingly upbeat.

JPMorgan reaffirmed a $170,000 upside target last month, while Standard Chartered analysts have maintained a $200,000 year-end projection. Wealth managers argue that a 1% to 4% allocation can provide long-term diversification with controlled risk.

Nancy Fahmy, who leads Bank of America's investment solutions group, framed the shift as a response to "growing client demand for access to digital assets." Translation: advisers were getting tired of telling clients no.

Technical Picture: Testing Critical Levels

Bitcoin price is up 5.5% today, holding near $91,000 as it tests the upper descending trendline of a major triangle formation. A breakout above that line would open the path toward the $94,000 to $96,000 region, where the 200-day EMA sits as a major resistance cluster. Traders consider that area the level that must be reclaimed to reset broader momentum.

If the test fails, the lower boundary remains well-defined. Buyers have repeatedly defended the $84,000 to $86,000 zone, creating a support band that has already produced multiple rebounds. Losing that floor would signal a meaningful deterioration in near-term structure.

After several weeks of steady outflows, Bitcoin recorded an estimated $150 million in positive net inflows, signaling fresh capital entering the market.

What This Means for the Crypto Market

Bank of America's policy reversal represents more than just another institution dipping its toe into crypto waters. With over 15,000 advisers now empowered to recommend Bitcoin ETFs, we're talking about potential access to trillions of dollars in client assets. Even if only a fraction of those clients allocate the recommended 1% to 4%, the capital flow could be substantial.

The move also signals growing confidence in the regulatory framework around spot Bitcoin ETFs. These products launched just over a year ago, and major institutions are now comfortable not just offering access, but actively recommending allocation. That's a meaningful vote of confidence in the maturation of crypto as an asset class.

Whether Bitcoin can reclaim its previous highs remains to be seen, but with Bank of America joining the institutional embrace, the infrastructure for mainstream adoption continues to solidify.