Bank of America Advises 1–4% Crypto Allocation as Bitcoin Recovers to $90k
Bank of America (BofA) has recommended that clients allocate a modest 1%–4% of their portfolios to digital assets for investors comfortable with high volatility, following Bitcoin’s recovery to about $90,000 after November’s swings. CIO Chris Hyzy of Bank of America Private Bank made the recommendation and the bank said its investment strategists will begin coverage of four Bitcoin ETFs in 2026. The guidance accompanies BofA’s note on its large retail footprint (roughly 70 million consumer and small-business clients and 59 million verified digital users). Institutional and corporate demand strengthened late November, with crypto ETPs drawing $1.07 billion in inflows during the final week amid US rate-cut expectations; Bitcoin, Ethereum and XRP led inflows ($464m, $309m and $289m respectively). The article also notes renewed volatility in MicroStrategy (formerly MSRT) shares after a slump; Michael Saylor purchased another 130 BTC, bringing the company’s total to roughly 650,000 BTC and announcing a $1.44bn reserve funded via ATM stock issuance. JPMorgan flagged a divergence between Bitcoin and gold as a potential risk signal, suggesting mixed macro indicators ahead of year-end. Key takeaways for traders: BofA’s formal allocation guidance may support continued institutional interest and inflows; near-term volatility remains likely around macro shifts (rate-cut expectations, liquidity moves); monitor Bitcoin ETF coverage developments and large corporate BTC buyers for liquidity and sentiment effects.
Bullish
The news is largely bullish for crypto markets. A major bank formally recommending a 1–4% allocation legitimizes crypto exposure for wealth clients and can encourage further institutional and retail inflows. BofA’s plan to cover four Bitcoin ETFs in 2026 signals growing mainstream adoption and product availability, which historically supports price appreciation and reduces structural barriers to capital. Recent $1.07bn ETP inflows in late November—driven by Bitcoin, ETH and XRP—demonstrate active demand tied to macro expectations (rate cuts). Large corporate buying (MicroStrategy’s additional 130 BTC and the company’s sizeable reserve) also tightens available supply and signals corporate conviction. Counterweights include heightened volatility after November and JPMorgan’s warning about Bitcoin–gold divergence as a risk signal; these imply short-term pullbacks remain possible around macro events. In sum: expect positive medium-term demand and constructive sentiment (bullish), while short-term volatility and risk-on/off swings may produce intermittent corrections. Traders should watch ETF coverage developments, ETP flows, macro policy cues (Fed/rate guidance), and sizeable corporate BTC purchases for trade signals and liquidity shifts.