Bank of America announced that it will begin allowing its wealth advisers to recommend crypto allocations in client portfolios

BY COMFORT OGBONNA

Bank of America announced on Thursday that it will begin allowing its wealth advisers to recommend crypto allocations in client portfolios starting next month, marking a major milestone for the digital asset industry. The decision represents one of the most significant steps taken by a major U.S. bank toward integrating digital currencies into mainstream wealth management.

Beginning January 5, advisers across Bank of America Private Bank, Merrill, and Merrill Edge will be empowered to suggest a variety of crypto-focused exchange-traded products (ETPs) to clients, with no required minimum asset level. Previously, only clients whose portfolios met certain thresholds could access bitcoin ETFs—an option made available earlier in 2024. With this new policy, the role of advisers expands from simply carrying out crypto-related trade requests to actively guiding clients on digital asset opportunities.

The announcement comes at a time when crypto markets continue to gain traction among institutional investors. Supporters argue that increased adoption, along with growing regulatory clarity encouraged by President Donald Trump’s stance on easing restrictions, has strengthened confidence in digital assets. Many large investors prefer exposure through ETFs and ETPs, which offer easier compliance, added security features, and improved liquidity compared to holding cryptocurrencies directly.

Chris Hyzy, Chief Investment Officer for Merrill and Bank of America Private Bank, noted that digital assets could serve as a small but meaningful component of diversified portfolios. “For investors who are strongly interested in thematic innovation and are comfortable with substantial volatility, a modest allocation of 1% to 4% in digital assets could be appropriate,” he said.

Crypto advocates maintain that assets like bitcoin can provide diversification and a hedge against inflation, positioning them as an attractive alternative to traditional assets. However, sceptics continue to highlight the risks, including price swings and cybersecurity threats.

November highlighted those concerns clearly. Bitcoin saw its steepest monthly dollar loss since May 2021, falling by more than $18,000 as substantial outflows rattled the market. Analysts at Merrill cautioned that while adoption supports long-term value, “periods of speculative excess can distort prices far above true utility.”

With Bank of America’s new guidance framework set to begin in January, the move could pave the way for broader integration of digital assets across the U.S. financial landscape, further solidifying crypto’s place in institutional strategy—even as debates about its stability and long-term value continue.