- Bank of America recommends a 1%-4% portfolio allocation in cryptocurrencies for select clients.
- The bank will track and cover four Bitcoin ETFs starting January 2024.
- The suggested allocation range varies by investors’ risk tolerance.
- Bank of America plans to launch its own stablecoin, reflecting growing interest in digital assets.
Bank of America has advised clients of its Merrill, Bank of America Private Bank, and Merrill Edge platforms to allocate between 1% and 4% of their investment portfolios to cryptocurrencies, mainly bitcoin. This marks the first time the bank has openly supported digital assets in its wealth management guidance.
Beginning January 5, 2024, Bank of America will track and cover four bitcoin exchange-traded funds (ETFs): the Bitwise Bitcoin ETF (BITB), Fidelity’s Wise Origin Bitcoin Fund (FBTC), Grayscale’s Bitcoin Mini Trust (BTC), and BlackRock’s iShares Bitcoin Trust (IBIT). These ETFs represent regulated investment vehicles that allow exposure to bitcoin.
Chris Hyzy, chief investment officer at Bank of America Private Bank, stated, “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.” He added that the lower percentage suits conservative investors, while the higher end is for those with a greater tolerance for risk.
Earlier this year, Bank of America announced plans to issue its own stablecoin, a type of cryptocurrency designed to maintain stable value. This move follows similar initiatives by major banks such as JPMorgan and Citigroup and signals the growing institutional acceptance of digital currencies.
The launch of bitcoin ETFs in January 2024 attracted significant institutional interest and has influenced this shift in Bank of America’s investment recommendations. The bank emphasizes the importance of investing in regulated products and understanding both the opportunities and risks involved in digital assets.
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