Bank of America Supports Up to 4% Crypto Allocation as Digital Assets Enter Traditional Portfolios

A significant change is taking place in traditional finance. Bank of America, one of the largest banking institutions in the United States, is now encouraging the use of cryptocurrencies in wealth management portfolios. The bank’s latest guidance supports a 1% to 4% allocation to digital assets, depending on an investor’s risk tolerance and long-term goals. This recommendation applies across its major advisory arms, including Merrill Lynch, Bank of America Private Bank, and Merrill Edge, which collectively oversee trillions in client assets.

For years, cryptocurrencies were kept outside formal model portfolios at major banks. Advisors could only discuss them when clients brought up the topic, and even then, guidance was limited. Bank of America’s new position signals a turning point. Crypto is no longer viewed as a fringe idea but as an asset class with a defined role in modern wealth strategy.

Why Bank of America Is Endorsing Crypto Exposure Now

“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, Bank of America Private Bank’s chief investment officer, reportedly said in a statement.

He describes the recommended allocation as modest but meaningful. The lower end of the range suits conservative investors, while the higher end is intended for those more comfortable with market swings. The fact that such a large institution is providing this guidance shows that crypto has reached a new stage of maturity.

A few key factors explain the shift. First, the introduction of regulated Bitcoin ETFs has changed the risk profile for institutions. These products offer secure custody, audited financial reporting, and a familiar structure that fits neatly into existing advisory frameworks. This removes many of the operational challenges that once made crypto difficult to adopt inside regulated wealth platforms.

Investor demand is another force driving the change. Many clients want access to digital assets as part of their long-term strategy, especially after years of strong performance, increasing global adoption, and expansion of institutional-grade infrastructure. Wealth managers have realized that denying these opportunities risks pushing clients to other platforms. By formally supporting a small allocation, Bank of America ensures that its advisors can meet client interest while maintaining a disciplined and risk-aware approach.

Competitive pressure also plays a role. Fidelity has been recommending crypto exposure since 2020, and its research supports a 2% to 5% allocation for balanced investors, with slightly higher ranges for younger clients. Vanguard, historically one of the most cautious firms in asset management, has recently opened access to crypto ETFs and mutual funds, a move that reflects shifting investor expectations. Bank of America’s decision ensures it remains aligned with industry-wide trends.

The 1–4% range strikes a balance between opportunity and risk. It provides enough exposure to participate in long-term growth while limiting the impact of volatility during market downturns. Banks rarely recommend large allocations to emerging asset classes, so this range reflects a carefully researched, conservative, and institutionally responsible stance.

For Bank of America’s more than 15,000 wealth advisors, this shift is meaningful. They can finally discuss crypto proactively, incorporate it into model portfolios, and offer structured guidance tailored to each client’s financial plan. This is a major improvement over the previous environment, where advisors had limited tools to support clients interested in digital assets.

Clients gain access to crypto exposure through regulated ETFs managed by well-known firms such as BlackRock, Fidelity, Bitwise, and Grayscale. These products eliminate the need for crypto wallets, private keys, or exchanges, making participation easier for people who prefer traditional financial platforms.

A Sign of a Broader Trend in Wealth Management

Bank of America’s new stance shows how far digital assets have come. What was once seen as too risky or experimental is now being treated as a legitimate part of long-term wealth planning. By supporting a small but meaningful allocation to crypto, the bank is acknowledging both the growth of the industry and the changing expectations of investors. This shift reflects a broader transformation in traditional finance, where digital assets are becoming tools for diversification rather than speculative outliers.

As major banks begin to include crypto in their official guidance, do you think digital assets will become a standard part of every modern investment portfolio in the years ahead?