Bank of America to let advisors recommend 1%–4% allocations to spot Bitcoin ETFs from Jan 2026
Bank of America (BofA) has revised its wealth-management policy to permit Merrill, BofA Private Bank and Merrill Edge advisors to proactively recommend allocations of 1%–4% of client portfolios to regulated spot Bitcoin ETFs, effective January 5, 2026. Guidance will be tailored by risk tolerance and client interest in blockchain innovation — roughly 1% for conservative investors and up to 4% for more risk-tolerant clients. BofA’s CIO Chris Hyzy emphasized using regulated instruments, clear client disclosure of risks and volatility, and reliance on custody and operational improvements. The bank initially approved four spot Bitcoin ETFs as eligible recommendations: BlackRock’s IBIT, Fidelity’s FBTC, Bitwise’s BITB and Grayscale’s Bitcoin Mini Trust. The policy replaces a prior restriction that barred advisors from initiating or recommending crypto exposure (clients could still buy crypto independently). The move follows similar 2025 policy shifts at major firms (Morgan Stanley, BlackRock, Fidelity, Vanguard) and signals growing institutional acceptance that could channel substantial institutional and retail flows into spot-Bitcoin ETFs, boosting liquidity and mainstream access. For traders, the decision may increase demand pressure on BTC around and after ETF reporting and inflows, raise liquidity in ETF shares, and shorten the path for retail-to-institutional capital rotating into spot Bitcoin products; however, volatility and regulatory risks remain key considerations.
Bullish
Allowing advisors at BofA to recommend 1%–4% allocations to regulated spot Bitcoin ETFs reduces a major distribution barrier for BTC exposure among high-net-worth and retail clients on advisory platforms. Past examples (e.g., institutional approvals and ETF launches) show that broadened advisor endorsement tends to direct steady, sizable inflows into ETF products, increasing demand for underlying Bitcoin. Short-term, the announcement can trigger bullish price reactions as traders front-run expected ETF inflows and portfolio shifts; volatility may spike around allocation implementation dates and reporting periods. Medium-to-long term, sustained advisor-driven allocations can deepen liquidity, narrow spreads between ETFs and spot BTC, and support higher price floors as institutional distribution channels enlarge. Caveats: the allowed allocations are modest (1%–4%), rollout dates (Jan 2026) delay immediate impacts, and regulatory or macro shocks could offset inflows, so momentum may be gradual rather than explosive.