Bank of America has officially endorsed cryptocurrency as a legitimate asset class for its wealth management clients, recommending allocations of up to 4% in investment portfolios. This landmark shift makes cryptocurrency accessible to millions of customers and signals growing mainstream acceptance of digital assets on Wall Street.
The banking giant’s new guidance applies to all clients across its Merrill, Bank of America Private Bank, and Merrill Edge platforms. This recommendation marks a significant evolution in how traditional financial institutions approach digital assets. Previously, only the bank’s wealthiest clients could access cryptocurrency investments upon special request to their portfolio managers.
Bank of America says its wealth management clients may put up to 4% of their portfolio in crypto https://t.co/VobK5T02k5
— Yahoo Finance (@YahooFinance) December 1, 2025
Bank of America’s Planned Implementation
Starting January 5, Bank of America will begin providing research coverage on four major Bitcoin ETFs. The selected funds 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). Together, these ETFs manage more than $94 billion in total assets.
This coverage will enable the bank’s 15,000+ wealth advisers to formally recommend cryptocurrency products to clients for the first time. Nancy Fahmy, head of Bank of America’s investment solutions group, noted that this update “reflects growing client demand for access to digital assets.”
The recommended allocation range is flexible, with lower percentages suitable for more conservative investors. Those with higher risk tolerance might consider allocations closer to the 4% upper limit. Bank of America’s guidance emphasizes that crypto investments should complement a well-diversified portfolio rather than dominate it.
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
Wall Street’s Broader Crypto Adoption
Bank of America isn’t alone in its embrace of cryptocurrency. Several major financial institutions have issued similar guidance over the past year, creating what appears to be an emerging consensus among Wall Street giants on appropriate crypto allocation levels.
Morgan Stanley’s Global Investment Committee recommended 2% to 4% crypto allocations for suitable clients in October, describing Bitcoin as “digital gold” and viewing crypto as a speculative but increasingly mainstream asset class. BlackRock, the world’s largest asset manager, advised investors to consider allocating about 1% to 2% of their portfolios to Bitcoin at the beginning of 2025.
Fidelity Investments has taken perhaps the most aggressive stance, urging clients to consider a 2% to 5% allocation for general investors. For customers under age 30, Fidelity suggested allocations of up to 7.5%, recognizing younger investors’ typically higher risk tolerance and longer investment horizons.
Institutional Shift Amid Market Changes
The timing of Bank of America’s announcement is noteworthy, coming during a period of significant market volatility. Bitcoin has experienced substantial price fluctuations, including a recent 33% drop from its all-time high of approximately $126,000. Despite these swings, institutional investors continue to increase their cryptocurrency holdings.
According to research from Bernstein, retail investors currently hold approximately 75% of spot Bitcoin ETF assets, making them the most exposed to price volatility. Meanwhile, institutional ownership of Bitcoin has increased from 20% to 28%, suggesting strategic accumulation by larger investors even as retail traders face market challenges.
Vanguard, previously one of the most crypto-skeptical major financial institutions, recently announced it would begin allowing certain crypto ETFs and mutual funds to be traded on its platform. This reversal highlights how rapidly attitudes toward digital assets are evolving in traditional finance.
The Future of Crypto in Traditional Banking
Bank of America’s endorsement represents more than just an investment recommendation. It signals that cryptocurrency has achieved a level of legitimacy within the traditional banking system that was unthinkable just a few years ago. Experts anticipate that other major banks, including Charles Schwab, Morgan Stanley, and regional lenders like PNC, may expand their crypto offerings as regulatory clarity improves.
The transformation has been accelerated by regulatory developments, particularly since the passage of crypto-friendly legislation under the Trump administration. The GENIUS Act in July 2025 has encouraged banks to adopt more open stances toward digital assets.
As cryptocurrency integration into mainstream finance continues, investors now have more regulated options than ever before. The evolving landscape suggests that cryptocurrency has moved beyond its early reputation as a fringe investment and is increasingly viewed as a legitimate, if still volatile, component of a diversified investment strategy.
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