Effective January 5, Bank of America has authorized its 15,000 wealth advisers to proactively recommend spot Bitcoin ETFs, ending a long-standing policy that restricted brokers to processing client-initiated requests only. The directive, issued via internal guidance, permits advisers across Merrill Lynch, Bank of America Private Bank, and Merrill Edge to pitch Bitcoin allocations of 1% to 4% for eligible portfolios.
The 1-4% “Modest” Mandate
The bank’s Chief Investment Office (CIO), led by Chris Hyzy, framed the allocation as a strategy for clients with a high tolerance for volatility and an interest in “thematic innovation.” The guidance explicitly caps recommendations at 4%, positioning Bitcoin as a diversifier rather than a core holding. This “modest” guardrail distinguishes BofA’s approach from the more aggressive stances of crypto-native funds, aligning with traditional risk management protocols.
The guidance frames crypto exposure as a targeted thematic allocation rather than a broad strategic bet. Bank of America Internal Memo via Cointelegraph
Approved Investment Vehicles
The authorization is limited to four specific U.S.-listed spot ETFs, selected for their liquidity and operational track records. Advisers are restricted to recommending:
- BlackRock: iShares Bitcoin Trust (IBIT)
- Fidelity: Wise Origin Bitcoin Fund (FBTC)
- Bitwise: Bitwise Bitcoin ETF (BITB)
- Grayscale: Bitcoin Mini Trust (BTC)
Notably, the list includes the Grayscale Mini Trust (ticker: BTC) rather than the flagship GBTC, likely due to the Mini Trust’s lower fee structure (0.15%).
Institutional Liquidity Impact
The policy shift opens the floodgates for adviser-driven flows from Merrill’s client base. Market reaction was swift, with spot Bitcoin ETFs recording $695 million in inflows on January 5 alone. Bitcoin (BTC) held firm above $91,200 (+1.6%) following the news, as the market priced in the potential for sustained buying pressure from one of the largest wealth management networks in the U.S.
