Strategic Allocation: Bank of America Endorses 4% Crypto Allocation for the Ultra-Wealthy

Why Bank of America Is Recommending Crypto for HNWIs

Bank of America (BAC) has endorsed a 1% to 4% portfolio allocation to digital assets for all clients of its Merrill, Bank of America Private Bank, and Merrill Edge platforms, marking a watershed in U.S. institutional wealth management policy. For the first time, more than 15,000 BofA advisers can now formally recommend exposure to regulated crypto vehicles—specifically, four leading spot bitcoin ETFs.​

• BofA’s CIO coverage will include Bitwise Bitcoin ETF (BITB), Fidelity Wise Origin Bitcoin Fund (FBTC), Grayscale Bitcoin Mini Trust (BTCM), and BlackRock’s iShares Bitcoin Trust (IBIT).​
• All recommendations emphasize liquid, regulated ETFs—no direct token purchase required.
• Shift brings BofA in line with Morgan Stanley, JPMorgan, BlackRock, and other top institutions.
• Analysts suggest even cautious portfolios should consider a 1% allocation to digital assets for true diversification; 4% is targeted for innovation-friendly, risk-tolerant clients.​
• The move responds directly to both persistent UHNW client demand and evolving perspectives on alternative assets.

Regulatory Clarity Unlocks Access

Previously, only clients actively seeking digital asset exposure could gain portfolio access. BofA’s network—serving some of the world’s wealthiest families and institutions—was effectively restricted from crypto, pushing clients to other venues for diversified strategies.​

Now, starting January 5, 2026, the wealth management giant will cover four key spot bitcoin ETFs—products with more than $94 billion under management—signaling institutional acceptance and the removal of key distribution barriers.​

Regulated ETF options bring:

• Institutional-grade custody
• Transparent pricing and tax efficiency
• Greater compliance oversight

“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.”

“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.

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

Institutional Adoption Accelerates

Wall Street sentiment on cryptocurrencies has shifted from skepticism to practical adoption. In 2024, reports show over 70% of institutional asset managers held digital assets in portfolios—up from less than 10% in 2020. In 2025, more than half of institutional investors planned to allocate over 5% of AUM to crypto-oriented vehicles.​

Global institutional crypto allocations are being driven by:

• Regulatory frameworks enabling ETF approvals and broader market integrity​
• Expanded custody infrastructure from major platforms
• The desire to generate uncorrelated returns as traditional markets consolidate
• Rapid innovation in tokenized real-world assets (RWAs) and blockchain settlement

What This Means for Modern Portfolio Construction

BofA’s 1–4% crypto allocation framework is not an outlier. Morgan Stanley has issued similar thematic recommendations, while JPMorgan forecasts bitcoin valuations reaching as high as $170,000, and Standard Chartered projects $200,000 by year-end 2025. By integrating bitcoin ETFs, wealth managers can treat crypto exposures with traditional asset allocation discipline: through ETF vehicles, regular rebalancing, and benchmark tracking.​

Key Advantages for C-Suite Portfolios

• Direct exposure to decade-defining technological innovation
• Portfolio volatility management through small, non-overweighted positions
• Regulatory clarity for institutional compliance, reporting, and risk oversight
• Professional research and due diligence from the bank’s chief investment office

Major Institutional Allocation Recommendations (2024–2026)

Peer Moves and Competitive Pressure

This policy update brings BofA in step with the other American wealth titans. Morgan Stanley, JPMorgan, Charles Schwab, and Fidelity all broadened crypto exposure through ETF vehicles in 2024 and 2025. European giants such as UBS and Swiss private banks have also mapped digital asset access for their family office clients.​

• BlackRock’s iShares Bitcoin Trust (IBIT) now manages over $15 billion in spot bitcoin alone; Strategy’s corporate treasury model has committed close to 640,000 BTC as of late 2025.​
• ETF adoption is rising, with U.S. and global products exceeding $115 billion in managed exposure by late 2025.
• Institutional participation is driving liquidity, compliance standards, and long-term “buy-and-hold” behavior among traditionally conservative allocators.

Strategic Rationale: Diversification, Growth, Compliance

For C-suite decision-makers, the allocation to regulated crypto assets fits the “liquid alternatives” bucket—hedging volatility and capturing returns uncorrelated to equities or fixed income. Crucially, both the regulatory approval of spot bitcoin ETFs and client demand have unlocked scalable, low-friction exposure.

• Rebalancing is now feasible, with clear model guidelines.
• Portfolio drawdown risk can be limited to under 0.5%-1% of total capital, even at a 4% exposure.​
• The “modest but material” allocation thesis is being validated both by major bank CIOs and by the inflows tracked in non-traditional asset categories.

The New Normal for Portfolio Innovation

For investment committees, family offices, and board members, Bank of America’s move cements digital assets as a core theme in 2026 portfolio reviews. Report after report shows institutional allocations are set at small but growing levels, strictly through regulated access points designed for scale, compliance, and risk management.​

CEOs and private investors should expect crypto assets to become a permanent, CIO-sanctioned pillar of multi-asset portfolios—no longer an exotic alternative, but a necessary building block for forward-looking wealth strategies.

Major Institutional Crypto Allocators (2024–2026)

The data-backed shift toward regulated crypto allocation is poised to reshape the landscape of family office and institutional asset management for years to come.