Bank of America Introduces Bitcoin Coverage, Suggests Up to 4% Allocation in Cryptocurrency

Bank of America's New Crypto Policy: Bank of America has begun recommending a 1% to 4% cryptocurrency allocation for its wealth management clients and will start covering multiple Bitcoin ETFs from January 5, marking a significant policy shift after years of restrictions on advisers recommending digital assets.

Industry Trends in Crypto Allocation: The bank's recommendation aligns with other major financial institutions like Morgan Stanley, BlackRock, and Fidelity, which have also suggested similar cryptocurrency allocation ranges, reflecting a broader industry trend towards regulated exposure to digital assets.

Regulatory Environment and Demand: The expansion of crypto access among major banks coincides with a deregulatory push from the Trump administration, which has increased demand for regulated digital asset exposure among advisers and clients, despite ongoing regulatory uncertainties.

Bitcoin Market Dynamics: Despite a recent decline in Bitcoin's price, long-term institutional forecasts remain optimistic, with projections suggesting significant upside potential, while recent positive net inflows indicate renewed interest and capital entering the Bitcoin market.