Source: Galaxy

Translation: Golden Finance

Last Tuesday, Bank of America (BofA) announced that starting January 2026, its financial advisors will be allowed to recommend Bitcoin investments to clients. At that time, four U.S. spot Bitcoin ETFs will be available on the bank's wealth management platform, which includes Merrill Lynch, Bank of America Private Bank, and Merrill Securities. Meanwhile, Bank of America's Chief Investment Officer Chris Hyzy suggested allocating 1% to 4% of investment portfolios to Bitcoin, echoing Morgan Stanley's recommendation from October.

On the same day, Vanguard opened its platform to third-party cryptocurrency ETFs and mutual funds. Earlier reports indicated that the company was considering this move. The newly launched products cover Bitcoin, Ethereum, Ripple, and Solana.

At the same time, Charles Schwab has set a timeline for launching spot trading for Bitcoin and Ethereum, aiming for mid-2026. Charles Schwab CEO Rick Wurster revealed the company's plan during a CNBC interview on July 18.

Galaxy's Perspective:

The story of institutional adoption of cryptocurrency continues.

In our briefing on October 17, we reported that Morgan Stanley lifted its restrictions on financial advisors using cryptocurrency funds, and Bank of America is following suit; additionally, we reported that Vanguard plans to offer cryptocurrency funds to its clients, and Citigroup plans to launch cryptocurrency custody services in 2026.

Three of the four major U.S. brokerages have now lifted restrictions on cryptocurrency investments: Bank of America lifted its restrictions this week, Morgan Stanley did so in October, and Wells Fargo Advisors added spot Bitcoin ETFs to its recommended list a few months ago. The last firm yet to lift restrictions is UBS Financial Services. Although we hear little from UBS in the cryptocurrency space, the company offers limited and conditional cryptocurrency investment channels to select clients. Perhaps the reason UBS has been slow to ease restrictions is that its parent company is headquartered in Switzerland, which may face more regulatory hurdles, and UBS must also consider its global business and focus on non-U.S. clients.

In addition to large brokerages, the world's second-largest asset management company, Vanguard, has also begun allowing clients to trade cryptocurrency ETFs and mutual funds. Reports suggest that this initiative was in preparation as early as late September, contrasting sharply with the company's previous skeptical stance on cryptocurrency. When U.S. spot Bitcoin ETFs launch in 2024, Vanguard told Business Insider:

"While we will continue to evaluate our brokerage services and assess the potential for new products to enter the market, spot Bitcoin ETFs will not be available for purchase on the Vanguard platform. We also have no plans to offer a Vanguard Bitcoin ETF or other cryptocurrency-related products."

"We believe these products do not align with our focus on asset classes such as stocks, bonds, and cash, which Vanguard considers the foundation for building a balanced long-term investment portfolio."

These shifts in attitude are primarily driven by client demand. As cryptocurrencies gain regulatory approval and increasingly integrate into the traditional financial system, investors are increasingly eager for related investment opportunities to avoid missing potential gains. As more companies open trading channels, competitive pressure has intensified, especially as backend supply is no longer a barrier. The U.S. Securities and Exchange Commission (SEC) has streamlined the listing process for cryptocurrency ETFs; the variety of available products has increased, providing investors with more choices; and the growth in assets under management has also enhanced liquidity.

Vanguard not only allows trading of spot Bitcoin ETFs but also permits trading of some other cryptocurrency funds and may support more regulatory-compliant cryptocurrency products, while Bank of America (BofA) only allows trading of four spot Bitcoin ETFs as of January. Notably, Vanguard has not recommended any specific Bitcoin portfolio allocation. Its decision to allow trading of cryptocurrency funds reflects a philosophy of providing investors with more options.

We previously pointed out that breaking down these distribution bottlenecks in the U.S. financial market could unlock approximately $30 trillion in assets managed by 300,000 financial advisors. Reports indicate that Bank of America serves about 70 million clients, managing over $2 trillion in assets; while Vanguard manages 50 million accounts with assets totaling $11 trillion. Together, they represent a market opportunity of up to $13 trillion. Even a mere 1% allocation could bring in about $130 billion in inflows, which would more than double the total inflows into U.S. spot cryptocurrency ETFs since their inception.

Bitcoin is likely to lead the way, with Ethereum and other altcoins potentially following on platforms that have yet to adopt them. As we mentioned in previous briefings, these capital flows tend to be more stable and less sensitive to short-term volatility, which in turn can reduce market fluctuations and attract more institutional capital.

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