Morning Minute: Bank of America Recommends up to 4% Crypto Portfolio Allocation

The crypto market liked the news, with majors jumping 7-10% on the back of Bank of America's new guidance plus Vanguard's crypto ETF debut.

Morning Minute is a daily newsletter written by Tyler Warner. The analysis and opinions expressed are his own and do not necessarily reflect those of Decrypt. Subscribe to the Morning Minute on Substack.

GM!

Today’s top news:

Yesterday it was Vanguard. Today it’s Bank of America.

More and more TradFi giants are reversing course on crypto.

Bank of America’s wealth division has added crypto to its model portfolios for the first time, recommending a 1% to 4% allocation for clients.

The new framework lists digital assets as an acceptable small allocation alongside other alternative investments and will be used by Merrill Wealth Management and Merrill Edge advisors going forward (along with new pitch materials).

The recommendation applies to both high-net-worth and mass-affluent clients.

This change came just a day after Vanguard expanded access to spot Bitcoin, Ethereum, and XRP ETFs after a multi-year holdout.

The market liked the news, with Bitcoin legging up 2% to near $93,000 and other crypto majors like ETH and SOL jumping 9-10%.

“For investors with a strong interest in thematic innovation and comfort with elevated volatility, a modest allocation of 1% to 4% in digital assets could be appropriate.” - Chris Hyzy, Bank of America Private Bank’s chief investment officer

BofA’s decision is just the latest in a series of putting crypto alongside all other top investable assets for wealth management clients.

For many clients, allocations are driven by advisor guidance. Not individual research or selection.

So inclusion in these models can majorly influence adoption.

And the impact of recommendations like this is twofold:

As a reminder, Bank of America isn’t alone in these recommendations.

Fidelity has provided portfolio allocation guidance of 2-5% to BTC with up to 7.5% for younger investors.

Soon enough, these allocations will be standard across all wealth management providers…

A few Crypto and Web3 headlines that caught my eye:

Here’s a rundown of major token, protocol and airdrop news from the day:

Here is the list of other notable headlines from the day in NFTs:

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