Bank of America Embraces Cryptocurrency Investments and Bitcoin ETFs
Bank of America allows clients to allocate 1% to 4% in cryptocurrencies, enabling access to Bitcoin ETFs for wealth management clients.
Bank of America is paving the way for its affluent clients to invest in Bitcoin through ETFs, allowing its advisers for the first time to suggest cryptocurrency allocations in client portfolios.
According to Yahoo Finance, the bank suggested its wealth clients allocate between 1% to 4% of their portfolios into cryptocurrencies via its Merrill and Bank of America Private Bank services.
“For investors interested in thematic innovation and willing to navigate market volatility, a modest digital asset allocation could be suitable,” stated Chris Hyzy, the bank’s chief investment officer.
Starting January 5, clients will have access to four Bitcoin ETFs, inclusive of Bitwise Bitcoin ETF, Fidelity’s Wise Origin Bitcoin Fund, Grayscale’s Bitcoin Mini Trust, and BlackRock’s iShares Bitcoin Trust.
This advancement signifies a significant shift as the bank’s 15,000 wealth advisers can now recommend these investment vehicles, previously accessible only via request.
Hyzy further emphasized the importance of regulated options and informed allocation to mitigate risks.
This move occurs alongside Vanguard’s recent decision to allow crypto ETF trading for its clients, showcasing an increasing trend among large financial firms toward regulated cryptocurrency products.
Source: Eric Balchunas
Source: Eric Balchunas
Bank of America currently stands as the second-largest bank in the US, with $2.67 trillion in total assets and more than 3,600 branches, as per Forbes.
Largest US banks by assets. Source: Forbes.com
BlackRock initiated the push for Bitcoin recognition among institutional investors by proposing up to a 2% Bitcoin allocation last December. They noted this level poses the same risk to a portfolio as investing in major tech stocks like Amazon and Apple.
Fidelity has also suggested a 2% to 5% Bitcoin allocation, echoing the importance of maintaining a conservative risk approach while capitalizing on Bitcoin’s potential. Additionally, Morgan Stanley has followed suit by recommending similar modest allocations to crypto, signaling a collective shift toward a shared strategy for digital asset exposure.
