One of the world’s largest financial institutions, Bank of America (BoA), has taken another step in the crypto market’s institutional adoption of cryptocurrency. On Tuesday, the bank announced that it is officially specifically recommending building a 1-4% cryptocurrency allocation to its wealthy clients and will make several Bitcoin ETFs available to them starting January 5.
According to Chris Hyzy, Chief Investment Officer of BoA Private Bank, this level of exposure may be particularly suitable for investors who who are interested in innovative stories and can comfortably deal with higher volatility. The bank has previously allowed some customers to access Bitcoin ETFs upon special request, but now for the first time, more than 15,000 wealth management advisors will be able to actively recommend these products.
Bank of America customers can choose from several ETFs
Starting January 5, BoA customers can choose from four major Bitcoin ETFs: Bitwise Bitcoin ETF (BITB), Fidelity Wise Origin Bitcoin Fund (FBTC), Grayscale Bitcoin Mini Trust (BTC) and BlackRock’s iShares Bitcoin Trust (IBIT). These are all licensed, regulated tools that provide lower-risk access to Bitcoin.
The announcement clearly shows that players in the traditional financial sector are increasingly accepting cryptocurrencies as an option for portfolio diversification.
It’s especially notable that the event occurred a day after the world’s second-largest asset manager, Vanguard, made a 180-degree pivot to allowing its clients to trade crypto ETFs. Vanguard now also allows trading of ETFs and mutual funds containing Bitcoin, XRP, Solana and other crypto assets on its platform. This is especially notable considering that even in 2024, the company’s management has staunchly avoided crypto-related products, including spot Bitcoin ETFs launched by BlackRock and Fidelity. According to reports, the reason behind the decision is clearly the ever-increasing demand from customers: Both retail and institutional investors have been pushing hard for Vanguard to finally open access to digital assets.
As early as 2024, BlackRock recommended to its investors an exposure to Bitcoin of 1-2%, citing the fact that it has a similar risk profile to the usual technology giants in portfolios such as Apple or Microsoft. Fidelity later came up with a recommended range of 2-5%, while Morgan Stanley suggested a cryptocurrency allocation of 2-4% for its advisor network.
Bank of America’s move is therefore part of a broader, increasingly decisive institutional trend: regulated Bitcoin ETFs are no longer considered exotic, but a rational portfolio element aligned with risk management. While the crypto market remains volatile, the presence and support of major multi-trillion banks clearly indicates that Bitcoin and digital assets have now secured a long-term stable place in the global investment environment.
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