Keep up with the trend! Bank of America (BAC.US) advises financial management clients to allocate digital currency exposure

The Zhitong Finance App learned that Bank of America (BAC.US) said that its wealth management customers should start considering including some cryptocurrency exposure in their portfolios.

The bank is recommending that customers of its Merrill Lynch Securities, Bank of America Private Banking and Merrill Lynch Edge Investment Platform can allocate 1%-4% of their assets to digital assets. Its investment strategy team will officially cover four Bitcoin ETF products starting January next year.

Chris Hyzy, Chief Investment Officer of Bank of America Private Banking, stated in a statement: “For investors who are passionate about innovative themes and can withstand high volatility, moderately allocating 1%-4% of assets to digital assets is a more appropriate choice. The core of our recommendations is the selection of regulated tools, careful configuration, and a clear understanding of the opportunities and risks involved.”

Starting January 5, 2026, Bitcoin ETFs covered by the bank's chief investment officer team will include: Bitcoin ETF-BitWise (BITB.US), Bitcoin ETF-Fidelity (FBTC.US), Grayscale Bitcoin Mini Trust (BTC.US), and Bitcoin ETF-iShares (IBIT.US).

Hyzy added: “The lower limit of this allocation range is more suitable for investors with a conservative risk appetite, while the upper limit is likely to suit customers who are more risk tolerant of their overall portfolio.”

Previously, Bank of America's high-net-worth customers could only obtain relevant cryptocurrency products through active applications, which meant that the bank's more than 15,000 wealth advisors were unable to actively recommend cryptocurrency exposure, and many retail investors had to seek alternative channel allocations.

“This policy update reflects the continued growth in customer demand for digital asset allocation,” said Nancy Fahmy, head of Bank of America's investment solutions division.

The Bank of America's proposal comes at a time when other large banks and asset management companies are setting up the cryptocurrency sector.

In its report in early October, the Morgan Stanley (MS.US) Global Investment Committee provided investors and financial advisors with 2%-4% cryptocurrency allocation parameters, calling it “a speculative but increasingly popular asset class, and many (but not all) investors will seek to get involved.”

At the beginning of 2025, BlackRock (BLK.US) recommended investors allocate 1%-2% of their portfolios to Bitcoin; in March 2024, Fidelity Investments proposed an allocation of 2%-5% (investors aged 30 and under can allocate 7.5%).

It was reported on Monday that Pioneer Group will allow some cryptocurrency ETFs and mutual funds to go online on its platform starting Tuesday. Currently, Morgan Stanley, Carson Wealth Management (SCHW.US), Fidelity Investments, and JPMorgan Chase (JPM.US) have opened some cryptocurrency ETF investment channels to all customers.

Fintech bank SoFi (SOFI.US) began introducing direct cryptocurrency trading services to retail customers a month ago, and a number of institutions such as Carson Wealth Management, Morgan Stanley, and the hyperregional bank PNC Financial Services Group (PNC.US) are expected to follow suit.

Many US banks are waiting for Congress to pass a key cryptocurrency bill — the bill will establish an overall framework for federal agencies to regulate the cryptocurrency market before introducing services related to direct cryptocurrency trading and escrow.

J.P. Morgan's global and US wealth management departments have yet to provide official cryptocurrency allocation guidelines to its 5,900 advisors, but the bank's plans to expand into other areas related to cryptocurrencies this year have accelerated. Since fall, J.P. Morgan has allowed Chase credit card customers to top up their accounts through the mainstream US cryptocurrency exchange Coinbase Global (COIN.US).

The Trump administration made major adjustments to US cryptocurrency policy this year, including removing various restrictions imposed by regulators during the Biden administration (these measures are aimed at isolating banks from some cryptocurrency activities) and providing a clearer regulatory environment for the cryptocurrency industry.

Despite this shift in policy making Wall Street and more investors optimistic about cryptocurrencies, the market has experienced a phased correction in recent weeks. After hitting an all-time high of over $126,000 in early October, the price of Bitcoin has dropped to around $87,000 as of press time. Since this year, the Bitcoin price has fallen by about 7%, while the S&P 500 index has risen by more than 15% over the same period.