Recent acceptance by big banks bodes well for crypto in 2026, advisors say

Bitcoin may be struggling in recent months, down around 30% from its all-time high, but cryptocurrency as an asset class is riding a hot streak heading into 2026 as more wealth managers plan to add it to their model portfolios.

Bank of America, for example, approved in early December a 1% to 4% advisor-endorsed allocation to certain digital assets beginning early next year for clients of its Merrill, Bank of America Private Bank, and Merrill Edge platforms. Their decision came soon after Vanguard Group finally allowed ETFs and mutual funds that primarily hold cryptocurrencies to be traded on its platform, reversing a longstanding position.

For the most part, financial advisors are more than fine with the change in attitudes at the big banks. In fact, many are already well ahead of the big banks when it comes to adding crypto to client portfolios.

Michael Durso, CEO and CIO at Shorehaven Wealth Partners, for one, says he’s seen a significant shift in sentiment toward cryptocurrency from some of the largest players in the financial services industry. And while it does not change how ShoreHaven approaches allocations, he admits it does provide meaningful validation for an asset class that was once met with skepticism.

“We’ve been offering crypto allocations since 2021 across a range of investment options. For us, crypto is treated just like any other part of the portfolio: it starts with a conversation around risk tolerance, time horizon, and overall financial goals. Once we establish a risk budget, we size and structure the allocation accordingly,” Durso said.

Matthew Smart, director of financial planning and portfolio analysis at WWM Investments, meanwhile, says the involvement of large institutions signals that crypto is moving from a fringe asset to an emerging component of the broader capital markets. He adds that when financial giants like Larry Fink and Jamie Dimon - who were once among the loudest skeptics - soften their tone, it becomes clear the conversation has shifted.

“That doesn’t mean crypto suddenly belongs in every portfolio, but it does reinforce that digital assets deserve to be evaluated thoughtfully, within a disciplined framework, rather than dismissed outright. For us, institutional adoption simply raises the bar: advisors need to understand the asset class, its risks, and where it may or may not add value,” Smart said.

Smart said many of his clients began owning cryptocurrencies before there were regulated, advisor-friendly vehicles available. As a result, his role is often about helping place existing exposure into a disciplined portfolio framework.

“When we do discuss crypto, we focus primarily on the largest and most established networks, such as Bitcoin and Ethereum, with Solana occasionally considered as a higher-volatility complement. Position sizes are intentionally kept small, generally well under ten percent of the total portfolio, and are accessed through regulated vehicles like ETFs rather than direct ownership,” Smart said, adding that another important consideration is that many clients already have meaningful exposure to the infrastructure that underpins crypto markets through traditional equities.

Elsewhere, Damon Polistina, director of research at Eaglebrook, believes that as more major institutions lean into digital assets, it reinforces the view that crypto is becoming a standard component of diversified portfolios.

“Bitcoin combines low long-term correlation with traditional markets, unique demand drivers, and asymmetric return potential. When held directly, crypto also offers advisors a distinctive advantage: the ability to tax-loss harvest. Because digital assets are not subject to the 30-day wash-sale rule, advisors can capture tax-loss harvesting opportunities in real time while still maintaining the client’s long-term allocation,” Polistina said.

The added benefits of crypto

Advisors say there are advantages crypto offers that traditional asset classes do not. Shorehaven’s Durso, for instance, says crypto can introduce diversification and an asymmetric return profile, even when used as a smaller, targeted allocation. There can also be potential tax benefits when managed properly.

“In a separately managed account, volatility can create opportunities for tax-loss harvesting, potentially enhancing after-tax returns and helping offset capital gains elsewhere in a client’s portfolio,” Durso said.

Along similar lines, Smart says crypto’s primary potential advantage lies in its asymmetric return profile and its historically low correlation to some traditional asset classes, particularly over longer periods.

“While correlations can spike during risk-off environments, a small allocation can still improve overall portfolio outcomes if sized appropriately. That said, any potential benefits have to be weighed against significant volatility and evolving market structure,” Smart said.

Looking ahead to the coming year, Smart believes the most important developments are continued regulatory clarity, deeper integration with traditional financial infrastructure, and the rapid growth of stablecoins as tools for payments and settlement rather than speculation. As stablecoins become more widely adopted, they tend to strengthen the larger blockchain ecosystems like Bitcoin and Ethereum by increasing transaction activity, liquidity, and real-world utility, according to Smart.

“Looking into 2026, we’re focused less on short-term price action and more on how consolidation, infrastructure maturity, and real-world adoption shape which networks emerge as durable long-term platforms versus those that struggle to maintain relevance,” Smart said.