Bank of America Endorses 1%–4% Cryptocurrency Allocation, Facilitates Bitcoin ETFs

Bank of America has recommended a cryptocurrency allocation of 1% to 4% for its wealth management clients, aligning with growing institutional interest in digital assets. The bank is also enabling access to new Bitcoin exchange-traded funds (ETFs), indicating a shift towards offering regulated cryptocurrency investment options.

Key Takeaways

Bank of America suggests a 1% to 4% cryptocurrency allocation for wealth management clients.
Clients will gain access to four Bitcoin ETFs starting January 5.
The bank emphasizes a regulated approach to cryptocurrency investing.
This recommendation aligns with a growing trend among major financial institutions to explore digital assets.

Bank of America CIFinancial Services

Growing Interest in Bitcoin

More prominent financial institutions are beginning to embrace Bitcoin, reflecting a surging demand for regulated digital asset products. Bank of America, the second-largest bank in the United States, has advised its wealth management clients through platforms like Merrill and Merrill Edge to consider a 1%–4% allocation to cryptocurrency. This recommendation was shared in a statement with Yahoo Finance.

Chris Hyzy, the chief investment officer at Bank of America Private Bank, noted that for investors who are interested in innovative themes and can handle increased volatility, a small percentage allocation to digital assets might be beneficial.

Starting on January 5, Bank of America will allow its clients to invest in four new Bitcoin exchange-traded funds (ETFs), which include the Bitwise Bitcoin ETF (BITB), Fidelity’s Wise Origin Bitcoin Fund (FBTC), Grayscale’s Bitcoin Mini Trust (BTC), and BlackRock’s iShares Bitcoin Trust (IBIT). This new initiative will provide wealthy clients access to Bitcoin ETFs, which were previously available only upon request, as Bank of America’s wealth advisers hadn’t been able to recommend any cryptocurrency investment products.

“Our strategy focuses on regulated products, carefully considered allocations, and a clear grasp of both the risks and opportunities,” Hyzy added.

Bank of America’s endorsement of Bitcoin signals a broader institutional willingness to invest in regulated cryptocurrency products. This announcement follows Vanguard’s recent decision to allow crypto ETF trading for clients, marking a significant shift in the stance of the world’s second-largest asset manager regarding digital asset ETFs.

Bank of America Assets _Source:_Eric Balchunas

Cointelegraph has reached out to Bank of America for further insights regarding its crypto allocation guidelines. According to Forbes, Bank of America holds approximately $2.67 trillion in consolidated assets and operates over 3,600 branches across the country.

Influencers in Bitcoin Allocation

BlackRock, recognized as the largest asset management firm globally, was among the first institutions to suggest a Bitcoin allocation of up to 2%. According to a report from Cointelegraph in December 2024, BlackRock indicated that a 1%–2% Bitcoin investment is a “sensible range for exposure,” as it carries a similar level of overall portfolio risk to investing in specific large-cap technology stocks, referred to as the “magnificent 7”—which includes notable companies like Amazon, Apple, Microsoft, Alphabet, Tesla, Meta, and Nvidia.

Earlier in June, asset management firm Fidelity also proposed a 2% to 5% Bitcoin allocation, emphasizing a balance that reduces exposure to potential losses while allowing for upside growth due to Bitcoin’s properties as an inflation hedge. Additionally, in October, Morgan Stanley recommended a 2% to 4% cryptocurrency allocation for investors and financial advisers, underscoring a trend among major financial institutions to adopt a common approach towards prudent, risk-managed exposure to digital assets.

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