The Recommendation

Bank of America wants its wealth management clients to consider digital assets exposure. Starting next year, investment strategies at BofA's Merrill, Bank of America Private Bank, and Merrill Edge platforms will support clients who want to allocate up to 4% of their portfolios to cryptocurrencies.

"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.

The Risk Levels

Hyzy described "the lower end of this range" as suitable for investors with a conservative risk profile. The 4% level is appropriate for those with high risk tolerances.

"Our guidance emphasizes regulated vehicles, thoughtful allocation, and a clear understanding of both the opportunities and risks," Hyzy added.

The ETF Coverage

On January 5, Bank of America's wealth management clients will initiate coverage of Bitcoin exchange-traded funds from Bitwise, Fidelity, Grayscale, and BlackRock.

The firm's CIO-covered bitcoin ETFs will include the Bitwise Bitcoin ETF, Fidelity's Wise Origin Bitcoin Fund, Grayscale's Bitcoin Mini Trust, and BlackRock's iShares Bitcoin Trust.

The Big Change

Historically, Bank of America's wealth management clients were only able to access crypto-related products upon request. That left over 15,000 wealth advisors at the firm unable to make crypto-related recommendations.

"This update reflects growing client demand for access to digital assets," said Nancy Fahmy, head of Bank of America's investment solutions group.

The Wall Street Wave

Bank of America's recommendation comes alongside a broad push into crypto from other big banks and asset managers.

In early October, Morgan Stanley's global investment committee suggested 2%-4% of portfolios should be in crypto, describing it as a "speculative but increasingly popular asset class that many investors, but not all, will seek to explore."

At the beginning of 2025, BlackRock put forth a case for investors to allocate 1%-2% of their portfolio to bitcoin. Last year, Fidelity suggested 2%-5% allocation, with up to 7.5% for young investors.

Who's Already In

Morgan Stanley, Charles Schwab, Fidelity Investments, and JPMorgan Chase already allow all customers to invest in certain crypto ETFs.

Bloomberg reported Monday that Vanguard will begin allowing some crypto ETFs and mutual funds on its platform starting Tuesday. A Bitcoin-friendly CEO was appointed to the world's second-largest asset manager in May.

Fintech bank SoFi began rolling out direct crypto trading to retail customers a month ago. Several banks, including Charles Schwab, Morgan Stanley, and PNC, are expected to follow suit.

JPMorgan's Approach

JPMorgan Chase's global and US wealth management division hasn't offered official guidance on crypto to its 5,900 advisers. But its plans to delve into various crypto areas have accelerated this year.

Since fall, JPMorgan has allowed Chase credit card customers to fund accounts with major US crypto exchange Coinbase Global.

The Policy Shift

The Trump administration has ushered in a dramatic reversal of US crypto policy this year. That includes removing several guidance barriers that Biden-era regulators built to ring-fence banks from crypto activities.

The administration has given the crypto industry more regulatory clarity. Many US banks are waiting for Congress to pass crucial crypto legislation that would set a general framework for how federal agencies regulate the crypto market before offering direct crypto trading, custody, and other services.

The Market Reality

Though the dynamic has turned Wall Street and many investors into bulls, the crypto market has faced a rough patch in recent weeks.

Bitcoin's price jumped to near $91,600 Tuesday, up 7.6% over 24 hours. But the largest cryptocurrency by market value is off about 30% since hitting a record high above $126,000 in early October.

The Bottom Line

Bank of America is endorsing 1%-4% crypto allocation for wealth clients starting January with coverage of four bitcoin ETFs, joining Morgan Stanley, BlackRock, and Fidelity in recommending digital asset exposure as the Trump administration's policy reversal accelerates Wall Street adoption despite bitcoin trading 30% below October's peak.