BofA starts backing crypto buys for clients

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Bank of America says its wealth management clients may put up to 4% of their portfolio in crypto.

crypto :: 4hrs ago :: source - yahoo finance

By David Hollerith

Bank of America (BAC) says its wealth management clients should start thinking about getting some crypto exposure in their portfolios.

The firm is endorsing a 1%-4% allocation to digital assets for clients of its Merrill, Bank of America Private Bank, and Merrill Edge platforms. Its investment strategists will begin covering four bitcoin ETFs in January.

"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," Chris Hyzy, chief investment officer at Bank of America Private Bank, said in a statement.

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

Starting Jan. 5, the firm's CIO-covered bitcoin ETFs will 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).

"The lower end of this range may be more appropriate for those with a conservative risk profile, while the higher end may suit investors with greater tolerance for overall portfolio risk," Hyzy added.

A Bank of America branch in Manhattan. (Erik McGregor/LightRocket via Getty Images)

Previously, Bank of America's wealthy clients had access to the products only upon request, meaning the bank's network of over 15,000 wealth advisers could not recommend crypto exposure, and many retail investors were left needing to look elsewhere for access.

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

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

In an early October note, Morgan Stanley's global investment committee provided investors and financial advisers with allocation parameters suggesting 2%-4% of their portfolio 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. In March 2024, Fidelity Investments recommended a 2%-5% allocation (and 7.5% for investors age 30 and below).

On Monday, Bloomberg reported that Vanguard will begin allowing some crypto ETFs and mutual funds on its platform starting Tuesday.

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

Fintech bank SoFi (SOFI) began rolling out direct crypto trading to retail customers a month ago, and several banks, including Charles Schwab, Morgan Stanley, and super regional lender PNC (PNC), are expected to follow suit.

Many US banks are waiting for Congress to pass a crucial piece of 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.

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 other areas of the crypto world have accelerated this year. Since the fall, it has allowed Chase credit card customers to fund accounts with major US crypto exchange Coinbase Global (COIN).

The Trump administration has ushered in a dramatic reversal of US crypto policy this year, including removing several guidance barriers that Biden-era regulators built to ring-fence banks from partaking in a range of crypto activities and giving the crypto industry more regulatory clarity.

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

After reaching its all-time high above $126,000 in early October, bitcoin's price has fallen by roughly a third to around $85,000 as of Monday afternoon. Year to date, bitcoin is down about 10%, while the S&P 500 (^GSPC) is up over 15% this year.

David Hollerith covers the financial sector, ranging from the country's biggest banks to regional lenders, private equity firms, and the cryptocurrency space.