by Coinstrooper Crypto Articles
Quick Take
  • Bank of America will begin CIO coverage of four Bitcoin ETFs, including BITB, FBTC, Grayscale Mini Trust, and IBIT, starting January 5, 2026.
  • He added that guidance emphasizes “regulated vehicles, thoughtful allocation, and a clear understanding of both the opportunities and risks.”
  • Previously, clients could access crypto ETFs only by request, a barrier that left many retail investors searching for exposure elsewhere.
  • The update “reflects growing client demand for access to digital assets,” said Nancy Fahmy, head of BofA’s investment solutions group.

What Happened

However, the move arrives at a challenging time for retail investors, who now hold the majority of Bitcoin ETF supply and are absorbing significant market losses.

“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,” said Chris Hyzy, CIO of Bank of America Private Bank.

Previously, clients could access crypto ETFs only by request, a barrier that left many retail investors searching for exposure elsewhere.

The update “reflects growing client demand for access to digital assets,” said Nancy Fahmy, head of BofA’s investment solutions group.

Fidelity suggests 2%–5%, and up to 7.5% for younger investors.

According to Bernstein, retail investors hold approximately 75% of spot Bitcoin ETF assets, making them the most exposed to price volatility.

Meanwhile, institutional ownership has increased from 20% to 28%, reflecting a strategic rotation into Bitcoin and Ethereum as retail investors capitulate.

New ETF Launches Deep in the Red

Market Context

Many firms now await Congressional clarity on custody, direct trading, and broader on-platform crypto services.

Retail Suffers the Most as Markets Turn Red

Why It Matters

He added that guidance emphasizes “regulated vehicles, thoughtful allocation, and a clear understanding of both the opportunities and risks.”

Details

Bank of America (BofA) has officially endorsed a 1%–4% allocation to crypto for its wealth management clients, marking a landmark shift in how Wall Street approaches digital assets.

BofA Opens the Door to Mainstream Crypto Exposure

Bank of America will begin CIO coverage of four Bitcoin ETFs, including BITB, FBTC, Grayscale Mini Trust, and IBIT, starting January 5, 2026.

It would enable more than 15,000 advisers across Merrill, the Private Bank, and Merrill Edge to recommend regulated crypto products for the first time proactively.

Wall Street Consensus Is Quickly Forming

BofA’s guidance follows a broader institutional shift:

Morgan Stanley recommends 2%–4% crypto allocations.

BlackRock endorses 1%–2%.

Vanguard will start allowing select crypto ETFs on its platform — a major philosophical reversal.

SoFi, Schwab, JPMorgan, and others now provide some form of ETF access or crypto-linked services.

These changes align with a sweeping policy reversal under the Trump administration, which dismantled several constraints imposed by the Biden administration on banks engaging with digital assets.

The timing of Wall Street’s adoption is striking. Bitcoin has dropped nearly 33% from its $126,000 peak, and is down about 10% YTD, even as the S&P 500 climbs 15%.

The recent wave of altcoin-heavy ETFs has fared even worse: