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Key Takeaways
- Bank of America’s recommendation that clients hold up to 4% in Bitcoin and other digital assets marks a significant step.
- The bank is lowering barriers for high-net-worth investors to gain crypto exposure through investment vehicles.
- The return of net inflows into Bitcoin and Ethereum ETFs after weeks of outflows suggests renewed institutional interest.
Bank of America has told its wealth management clients that it recommends holding up to 4% of Bitcoin and other crypto assets.
The guidance represents one of the bank’s strongest signals yet that cryptocurrencies are moving closer to mainstream portfolio construction, as Bitcoin’s price soars above $92,000.
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Investors Recommended To Hold Bitcoin
As part of the shift, Bank of America will begin coverage of four spot Bitcoin exchange-traded funds (ETFs) in January.
The funds include offerings from Bitwise, Fidelity, Grayscale and BlackRock, all of which provide direct exposure to Bitcoin through U.S.-listed ETFs approved last year.
“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, chief investment officer at Bank of America Private Bank, said in a statement.
According to Hyzy, the “lower end of this range may be more appropriate” for more conservative investors, with the higher end recommended for those able to handle more risk.
Bitcoin Climbs Above $92,000
Bitcoin prices moved higher on Monday, rising to around $92,265 in early trading hours.
CCN analysis found that digital assets rebounded quickly after initial headlines that U.S. forces captured Venezuela’s President Nicolás Maduro over the weekend.
“If this bullish momentum holds, Bitcoin could soon rally toward $98,139,” CCN analyst Victor Olanrewaju wrote in a recent report.
“In a highly bullish crypto market, the price might even target $103,518.”
However, he noted that a reversal below the $85,000 support zone is also at risk.
Despite the recent rally, Bitcoin remains lower for the year, down over 6% in 2025.
Banks and Crypto
Bank of America’s move mirrors a broader trend among major U.S. financial institutions moving into the crypto space.
JPMorgan recently launched a blockchain-based deposit token for institutional clients and recently filed a structured product linked to BlackRock’s Bitcoin ETF.
The bank’s asset-management division is also introducing a private tokenized money-market fund backed by Ethereum, according to reporting by The Wall Street Journal.
The fund, called the OnChain Net Yield Fund, aims to combine the stability and yield of traditional cash-management products with blockchain features, such as faster settlement.
Citi is also reportedly developing a crypto custody platform with plans to roll it out by 2026.
Why Does This Matter?
In the years since its inception, Bitcoin has remained widely excluded from traditional portfolio construction and discussion, despite its growing size and liquidity.
Traditional banks have long pointed to regulatory uncertainty and sharp price swings as reasons for investors to avoid crypto.
Bank of America’s latest move brings Bitcoin into traditional investment discussions, placing it in the recommended portfolios of one of the biggest banks in the world.
Bitcoin’s growth in society, boosted by global endorsements from President Donald Trump, as well as the increasing availability of regulated products, has helped catapult Bitcoin into the mainstream.
The recommendation is likely to help expand Bitcoin’s investor base beyond retail traders and crypto-native funds, further boosting the growing popularity of regulated products, such as spot Bitcoin ETFs.
Bitcoin ETFs
Last week, Bitcoin and Ethereum ETFs recorded their first day of net inflows in several weeks, snapping a prolonged stretch of investor withdrawals just ahead of the end of the year.
Data showed that U.S.-listed Bitcoin ETFs attracted roughly $355 million in net inflows on Dec. 30, ending a seven-day run of persistent redemptions.
Ethereum ETFs also reversed course, drawing close to $68 million and breaking a four-day outflow streak.
The shift followed a challenging period in mid-December, when ETFs tracking the two largest digital assets saw heavy withdrawals.
Between Dec. 15 and Dec. 19, combined outflows from Bitcoin and Ethereum products totaled more than $1.1 billion, reflecting widespread risk reduction by institutional investors.
Bitcoin-focused funds accounted for the bulk of those losses, shedding more than $750 million during the period, while Ethereum ETFs saw net redemptions of about $560 million.
The selling pressure was attributed by many analysts to thin holiday liquidity and year-end portfolio adjustments.
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