Bank of America’s Bold Call: Allocate 4% of Your Portfolio to Crypto Now

Wall Street's old guard just placed a bet on digital gold.

### From Skepticism to Strategy

For years, traditional finance viewed crypto as a fringe asset—too volatile, too unproven. That narrative crumbles today. A major institution shifts its stance, moving from cautious observation to concrete allocation advice. It's not a tentative dip of the toe, but a calculated strategic move.

### The Magic Number: Four Percent

The recommendation carries the weight of institutional analysis. Four percent isn't a random figure plucked from thin air; it represents a calculated entry point for portfolio diversification. It's enough to matter if the thesis plays out, but not enough to sink the ship if markets turn. This specific allocation targets a sweet spot between aggressive positioning and prudent risk management.

### A New Chapter for Portfolio Construction

This move signals a fundamental shift. Digital assets are no longer relegated to a speculative sidebar in investment discussions. They're now on the main stage, presented as a core component of a modern, diversified portfolio. The message cuts through the noise: ignoring this asset class might mean missing a foundational piece of future growth.

### The Fine Print and the Future

Adopting this stance doesn't erase volatility or regulatory hurdles. The path forward remains complex. Yet, the recommendation itself bypasses years of debate, treating crypto not as a philosophical question, but as a practical allocation puzzle. It's a nod to the future, wrapped in the cold, hard math of portfolio theory—and perhaps a quiet admission that betting against technological innovation has been a losing strategy for decades. After all, in finance, the most expensive advice often comes from those who waited for a 'safe' entry point that never arrived.

In a Tuesday statement to clients, Bank of America endorsed a 1%-4% allocation to crypto assets for clients of its Merrill, Bank of America Private Bank, and Merrill Edge platforms. In addition, BofA investment strategists will begin tracking and covering four bitcoin ETFs in January. The launch of BTC ETFs in January 2024 was a huge success and sparked a bit of a revolution for crypto on an institutional level. Bank of America acknowledged the growing influence of crypto earlier this year and has now officially endorsed it to its clients.

“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 the endorsement. “Our guidance emphasizes regulated vehicles, thoughtful allocation, and a clear understanding of both the opportunities and risks.”

Furthermore, Bank of America’s CIO-covered bitcoin ETFs will include 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), starting January 5th. “The lower end of this range may be more appropriate for those with a conservative risk profile, while the higher end may suit investors with greater tolerance for overall portfolio risk,” Hyzy added in his statement.

Earlier this year, Bank of America announced plans to launch its own stablecoin, following in the footsteps of JPMorgan and Citigroup. CEO Brian Moynihan didn’t give a timeline yet for the announcement, but it was one of the bank’s first proclamations of its interest in digital assets.