Bank of America says clients can allocate up to 4% to crypto

Bank of America has officially opened the door for its wealth management clients to include crypto in their portfolios. They are recommending a 1%–4% allocation through regulated Bitcoin ETFs beginning 5 January 5. 

However, beyond the headline, what stands out is the timing of this shift — it arrives during a broad market pullback, not at a cycle peak.

A strategic pivot in a cooling market

The global crypto market cap currently sits at $3.09 trillion, according to new data (from CoinMarketCap.

That’s down sharply from $3.71T last month, yet still well above the $2.42T yearly low.

Source: CoinMarketCap

This paints a very different backdrop from the euphoric rallies that typically precede new institutional endorsements. 

Instead, BofA’s guidance lands during a corrective phase, suggesting the bank views crypto as a long-term asset class rather than short-term speculation.

What BofA is actually allowing

According to reports, beginning 5 January, Bank of America’s CIO office will formally cover and recommend four spot Bitcoin ETFs:

• Bitwise Bitcoin ETF [BITB]
• Fidelity Wise Origin Bitcoin Fund [FBTC]
• Grayscale Bitcoin Mini Trust [BTC]
• BlackRock iShares Bitcoin Trust [IBIT]

This is the first time advisors on Merrill, Private Bank, and Merrill Edge can proactively recommend crypto exposure — a major shift from the previous “request-only” framework that kept many clients from accessing the asset class.

CIO Chris Hyzy framed the allocation as appropriate for investors “with interest in thematic innovation and comfort with elevated volatility,” emphasizing regulated products and risk-aligned sizing [1–4%].

Why the timing matters for crypto

Crypto’s market cap has cooled from its late-summer highs, mirroring Bitcoin’s fall from above $126,000 to the mid-$80,000 range. Yet institutions are increasing, not decreasing, their engagement:

• Morgan Stanley recommends 2%–4% crypto allocation
• BlackRock supports a 1%–2% allocation case
• Fidelity suggests 2%–5%
• Vanguard is beginning to allow select crypto funds
• JPMorgan, Schwab, and PNC have opened access pipelines

The trend shows that Wall Street wants regulated crypto exposure integrated into traditional portfolios, even during downturns.

This suggests a growing institutional consensus that crypto markets have matured sufficiently to withstand — and potentially benefit from — cyclical volatility.

A vote of confidence despite the correction

By allowing crypto allocations at a moment when the total market cap has dipped nearly $600 billion in a month, Bank of America is signaling:

• it sees long-term structural demand
• it believes ETFs are a safe, compliant entry point
• and it expects client appetite to keep rising

It’s a different kind of institutional endorsement — one that doesn’t chase hype but leans into market structure, regulation, and portfolio construction.