Bank of America: Wealth Clients Could Allocate Up to 4% to Crypto in 2025–2026

In a notable shift for traditional finance, Bank of America’s latest private-client guidance indicates that its wealth management division now views a 3–4% allocation to cryptocurrency as reasonable for qualified high-net-worth and ultra-high-net-worth investors. The recommendation, outlined in internal documents and confirmed by multiple advisors in late November 2025, marks one of the clearest endorsements yet from a major U.S. bank for mainstream portfolio exposure to digital assets. While still framing crypto as a high-volatility asset class, the bank emphasizes Bitcoin and select large-cap tokens as the primary vehicles, reflecting growing institutional comfort with regulated exposure routes.

Why Bank of America Now Supports a 4% Crypto Allocation

Bank of America’s wealth management arm cites several structural changes that have reduced perceived risk since the 2022 bear market. Spot Bitcoin and Ethereum ETFs, clearer regulatory pathways in the U.S. and Europe, and improved custody solutions from partners like BNY Mellon and State Street have all contributed to a more favorable risk-adjusted profile. Analysts note that Bitcoin’s correlation with equities has declined to around 0.45 year-to-date through December 2025, offering diversification benefits during periods of monetary easing.

The 3–4% range aligns closely with allocations already adopted by university endowments, sovereign funds, and multi-family offices that the bank benchmarks against. For a typical $10 million portfolio, this translates to $300,000–$400,000 in crypto exposure, usually implemented through regulated ETFs or separately managed accounts rather than direct self-custody.

• Spot ETF Availability: Clients can now access Bitcoin and Ethereum through familiar brokerage accounts with no KYC friction.
• Custody Improvements: Institutional-grade cold storage and insurance wrappers mitigate counterparty risk.
• Historical Performance: Bitcoin’s 5-year CAGR of approximately 60% (as of Dec 2025) justifies a modest satellite position in growth-oriented portfolios.

How the Recommendation Is Being Implemented in Practice

Advisors report that the guidance is not a blanket green light; clients must still meet accredited-investor criteria and complete enhanced risk questionnaires. The bank favors passive, low-fee ETF exposures (e.g., BlackRock iShares, Fidelity, or Bitwise products) over active funds or individual altcoins. Direct holdings of smaller tokens remain off-limits for most managed accounts due to liquidity and regulatory concerns.

For clients seeking higher conviction, the bank permits up to 5% in separately managed accounts that include Ethereum staking or covered-call strategies, provided the overall crypto sleeve stays within the 4% ceiling. Rebalancing is typically quarterly, with strict sell disciplines if volatility spikes beyond predefined thresholds.

• Core Recommendation: 2–3% Bitcoin ETF + 1% Ethereum ETF for balanced portfolios.
• Aggressive Variant: Up to 4–5% total, incorporating light staking yield or options overlay.
• Prohibited Assets: Meme coins, micro-cap tokens, and unregistered platforms remain excluded.

What This Means for Broader Institutional Adoption

Bank of America’s move follows similar quiet upgrades at Morgan Stanley (3% guideline) and Wells Fargo (pilot programs up to 2%) throughout 2025. Industry sources indicate that aggregate U.S. private-bank exposure to crypto has already surpassed $25 billion, with inflows accelerating after the November 2024 election outcome.

The 4% ceiling is expected to creep higher over the next 18–24 months if Bitcoin maintains its store-of-value narrative and regulatory tailwinds continue. For now, the guidance signals that the “experimental” phase of institutional crypto allocation is effectively over at the largest U.S. wealth managers.

• Peer Comparison: Aligns with Yale (2.5%), Stanford (3.8%), and several Middle Eastern sovereign funds (4–7%).
• Next Milestone: Analysts anticipate a 5–7% range becoming standard by late 2026–2027 if spot ETFs expand to Solana or other layer-1 assets.

In short, Bank of America’s formal acceptance of a 3–4% crypto allocation confirms that digital assets have moved from fringe discussion to standard portfolio-construction consideration for America’s wealthiest investors. The bank continues to stress that crypto remains a volatile satellite holding, not a core asset, and strongly recommends using only regulated, insured vehicles available through established brokerage platforms.