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

Business

GM +0.97% PENGU34466-USD +12.02% ETH-USD +6.72%

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:

• Crypto majors pop 7-10% as Vanguard debuts crypto access; BTC at $92,900

• Bank of America recommends up to 4% crypto allocation for wealth clients

• Ethereum’s Fusaka upgrade set to debut today

• Kalshi raises at $11B valuation; co-founder Luana becomes youngest female billionaire

• Pudgy Penguins announce partnership with NHL for Winter Classic

💼 Bank of America Adds Crypto to Its Official Allocation Models

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).

Bank of America Endorses Up to 4% Allocation of Wealth Management Portfolios to Crypto: Report

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:

• upfront portfolio re-balancing (bigger, one-time flows)

• ongoing buying as funds are directed into the market (the infinite twap)

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…

🌎 Macro Crypto and Memes

A few Crypto and Web3 headlines that caught my eye:

• Crypto majors are very green up 6-10% after Vanguard’s crypto debut & news out of BofA; BTC +6% at $92,900; ETH +9% at $3,070, BNB +7% at $899, SOL +10% at $142

• SUI (+24%), PENGU (+19%) and LINK (+18%) led top movers

• Ethereum’s Fusaka upgrade is set to launch today, expected to improve how mainnet ingests L2 data & make rollups cheaper and more scalable

• Bank of America is now recommending a crypto allocation of 1%-4% for its investment clients across Merrill Lynch & the Private Bank

• Kraken agreed to acquire tokenization platform Backed Finance, aiming to accelerate adoption of tokenized stocks

• Chainlink launched its “LINK Everything” initiative, a full tokenization stack showcasing CCIP, new compliance tools, data and compute services and more

• Crypto-friendly Kevin Hasset is now an 85% favorite to be the new Federal Reserve Chair following Jerome Powell, jumping after Trump’s comments yesterday

• Binance announced that cofounder He Yi has been appointed as Co-CEO

• The UK officially created a new category of property for crypto and NFTs with the passing of its Property Act

Kraken to Acquire Tokenization Platform Backed Finance as Crypto Exchange Extends Buying Spree

In Corporate Treasuries / ETFs

• The total spot BTC ETF volume passed $5.1B yesterday as Vanguard customers were eligible to buy for the first time

• Saylor is meeting with MSCI to discuss the potential exclusion of MSTR from their index ahead of the Jan 15 decision

• Hyperliquid Strategies merged with Sonnet Bio Therapeutics to establish an $888M HYPE DAT

• Grayscale debuted the first Chainlink ETF in the IS

• 21Shares announced new ETPs for Morpho and Ethena

In Memes / Onchain Movers

• Memecoin leaders are slightly green with SPX & Fartcoin leading; DOGE +1%, Shiba +1%, PEPE -1%, PENGU +2%, BONK +2%, TRUMP +1%, SPX +12%, and FARTCOIN +1%

• ORE (+40%), USELESS (+20%) and ALCH (+40%) led notable onchain movers

💰 Token, Airdrop & Protocol Tracker

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

• Flow CEO Roham announced 2 new products, Flow Credit Markets and Peak Money along with changes to FLOW tokenomics

• Rekt Drinks signed Superior Beverage Group as their newest distribution partner, gaining access to 13,000 retailers

• Jupiter is set to launch the Humidifi WET token today on new DTF platform

🚚 What is happening in NFTs?

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

• NFT leaders were mostly flat; Punks -1% at 30.59 ETH, Pudgy +5% at 5.6, BAYC even at 5.67 ETH; Hypurr’s +2% at 590 HYPE

• Doodles (+8%) and Good Vibes Club (+7%) led notable movers

• Pudgy Penguins announced an NHL partnership for the 2026 Winter Classic

• Moonbirds launched redemptions for their mystery blind boxes