Bank of America (BofA) officialized a historic shift in its investment policy, recommending a crypto allocation of up to 4% for its wealth management clients. Chris Hyzy, the entity’s CIO, confirmed that this strategy will come into effect on January 5, 2026, facilitating access to regulated products.
Starting on the noted date, more than 15,000 advisors from Merrill and Private Bank will be able to proactively suggest these digital assets to their client portfolios. The coverage will include specific exchange-traded funds such as BITB, FBTC, Grayscale Mini Trust, and IBIT, opening the doors to massive regulated exposure. Nancy Fahmy, head of investment solutions, highlighted that this update responds directly to growing client demand to access these financial instruments securely.
On the other hand, this decision aligns BofA with a broader institutional consensus that already includes financial giants like Morgan Stanley and BlackRock. Previously, retail investors had to explicitly request access to these products, facing barriers that limited their effective participation in the open market. Now, the crypto allocation is presented as a diversification strategy for profiles that tolerate volatility and seek thematic innovation within their modern portfolios.
Could institutional entry reverse the current losses of the retail sector?
Likewise, the report comes at a critical time where Bitcoin has fallen nearly 33% from its all-time high of 126,000 dollars. Data from Bernstein reveals that retail investors hold approximately 75% of assets in spot Bitcoin ETFs, absorbing the majority of recent market losses. Meanwhile, new ETF launches linked to altcoins are trading in the red, with small-cap indices touching lows not seen since November 2020.
Finally, Wall Street’s aggressive entry suggests an acceleration in institutional adoption, although volatility will remain a determining factor in the short term. Upcoming movements are expected to depend on pending legislation in Washington, which will define how deeply banks can integrate cryptocurrencies into their services. Thus, the market awaits a potential strategic rotation that could balance the scales between retail losses and the massive incoming institutional capital.
