Bank of America has announced that, starting January 5, 2026, wealth management advisors from Merrill Lynch, Bank of America Private Bank, and the Merrill Edge platform will proactively recommend allocating 1% to 4% of clients’ portfolios to crypto assets. This marks a shift from the previous "discuss only upon request" passive approach to advisor-driven, professional allocation recommendations. More than 15,000 advisors at the bank will follow these new guidelines.
Policy Shift
Bank of America’s move isn’t an isolated internal decision. Its wealth management division notes that client demand for digital asset allocations continues to grow. This demand is fueled by a series of structural changes in the crypto ecosystem since the 2022 market correction, which have significantly reduced perceived risks for institutional investors. These changes include the launch of spot Bitcoin and Ethereum ETFs, enabling investors to conveniently access crypto through familiar, traditional brokerage accounts.
Additionally, clearer regulatory frameworks in the US and Europe, along with improved custody solutions from established financial institutions like State Street, have created a safer and more compliant investment environment.
Deeper Significance
This initiative by Bank of America goes beyond simply adding new products. It represents a practical step in the traditional financial system’s formal recognition of crypto assets as a legitimate asset class. The recommended 1%-4% allocation centers on the principle of "moderation." Chris Hyzy, Chief Investment Officer of Bank of America Private Bank, notes that such allocations are suitable for investors who are enthusiastic about thematic innovation and can tolerate high volatility.
The suggested range is designed to enhance portfolio diversification and long-term growth potential while keeping risk under control. Hyzy explains that the 1% lower bound is appropriate for conservative investors, while the 4% upper bound suits those with higher risk tolerance.
This approach does not suggest that clients directly buy and hold cryptocurrencies themselves. Instead, the bank prefers to recommend exposure via regulated spot Bitcoin ETF products. Starting January 5, the Chief Investment Office will officially cover the following ETFs:
- BlackRock iShares Bitcoin Trust (IBIT)
- Fidelity Wise Origin Bitcoin Fund (FBTC)
- Bitwise Bitcoin ETF (BITB)
- Grayscale Bitcoin Mini Trust (BTC)
Industry Trend
Bank of America is not a pioneer in this space, but rather is aligning with a clear institutional trend. Previously, Morgan Stanley’s Global Investment Committee had advised investors to allocate 2%-4% to crypto assets. Earlier, BlackRock recommended a 1%-2% allocation at the start of 2025, while Fidelity suggested a range of 2%-5% in March 2024 (with allocations for investors under 30 reaching as high as 7.5%).
Major financial institutions such as Vanguard, Charles Schwab, and JPMorgan have also opened access to crypto ETFs for their clients. This demonstrates that integrating crypto assets into wealth management frameworks has become a consensus among leading US financial institutions.
Signal for Action
For everyday investors, Bank of America’s policy change is a significant market signal. After more than a decade of development, crypto assets are now reaching a broader investor base through the most traditional and mainstream financial channels. In practice, banks typically refine their recommendations into more specific strategies. For balanced portfolios, the core suggestion may be to allocate 2%-3% to Bitcoin ETFs, plus 1% to Ethereum ETFs. For more aggressive clients, while maintaining the overall allocation cap, strategies might expand to include Ethereum staking yields or options-based approaches.
Regardless of the strategy, banks emphasize strict risk management, typically rebalancing portfolios quarterly and enforcing disciplined selling when volatility exceeds preset thresholds.
Market Outlook and Data Analysis
Bank of America’s move comes as the market is actively forecasting the outlook for crypto in 2026. Multiple institutions believe that, although the market may enter a consolidation phase, the structural process of institutionalization is irreversible. Galaxy Digital predicts that Bitcoin could reach $250,000 by the end of 2027. 21Shares estimates that by 2026, assets under management in crypto ETFs could exceed $400 billion.
Based on Gate market data, we can observe market dynamics before and after major policy announcements from traditional financial institutions. Such news often boosts market attention and trading sentiment in the short term, but long-term price trends remain driven by macroeconomic factors, regulatory developments, and broader market adoption. Investors should recognize that crypto prices are highly volatile. Even as institutional adoption accelerates, sharp price swings and uneven global regulation remain key risks.
Bank of America’s 4% allocation recommendation essentially positions crypto assets as high-volatility "satellite" holdings, rather than core portfolio components. The value lies in their growth potential and the diversification benefits from low correlation with traditional assets.
The boundaries between the crypto world and traditional finance are rapidly dissolving. Vanguard has already allowed certain crypto ETFs on its platform, and JPMorgan has introduced Bitcoin-linked ETFs and structured notes tied to the four-year halving cycle. Citibank plans to offer crypto custody services by 2026. Meanwhile, stablecoins are being viewed by giants like BlackRock and JPMorgan as transformative forces for global payments and financial infrastructure. Looking ahead, if spot ETFs expand beyond Bitcoin and Ethereum to include other major assets like Solana, analysts expect the standard institutional allocation range could rise from the current 1%-4% to as much as 5%-7%.
