Bank of America Enhances Crypto Options for Wealth Management Clients

Bank of America (BAC.N) announced on Thursday that starting January 5, it will permit its wealth advisors to suggest cryptocurrency allocations within client portfolios, marking a significant development for the digital asset industry. This initiative will allow advisors at Bank of America Private Bank, Merrill, and Merrill Edge to recommend various crypto exchange-traded products (ETPs) without requiring clients to meet asset thresholds. Previously, only clients with assets exceeding certain limits had access to bitcoin ETFs since early 2024. This change shifts the role of advisors from merely executing crypto transactions to providing advice. Amid ongoing efforts by U.S. President Donald Trump to ease regulatory burdens on the asset class, cryptocurrency has seen increased adoption from institutions, many of which prefer ETPs for their enhanced liquidity, security, and easier compliance compared to direct asset management. Chris Hyzy, Chief Investment Officer for Merrill and Bank of America Private Bank, suggested that for investors inclined towards innovative themes and who can handle higher volatility, an allocation of 1% to 4% in digital assets may be suitable. Supporters of cryptocurrency advocate for its potential as a hedge against inflation and traditional asset fluctuations, while critics caution against its inherent volatility and security risks. In November, Bitcoin experienced a decline of over $18,000, marking its most significant monthly dollar loss since May 2021 amid a mass exit from the market. Merrill noted that while there is a genuine connection between adoption and long-term value, it is not assured, and periods of speculative exuberance can inflate prices beyond their actual utility. Reporting by Ateev Bhandari in Bengaluru; Edited by Krishna Chandra Eluri.