By Brett Munster
They all bend the knee
In our November 11 issue, we chronicled how a number of major financial institutions — from large banks to payment giants — that were once skeptics of crypto recently reversed course and embraced digital assets. In the weeks since that article, the trend has not merely continued; it has accelerated. Three of the most influential pillars of U.S. wealth and brokerage finance — Vanguard, Bank of America, and Charles Schwab — firms that for years either outright refused or deliberately delayed entering the space, now fully adopted crypto. Taken together, these developments represent one of the clearest signals yet that crypto is no longer peripheral to traditional finance; it is being woven directly into its core distribution channels, opening the door to trillions of dollars in new demand.
On December 2, Vanguard ended its long-standing prohibition on crypto exchange-traded funds. For the first time ever, more than 50 million clients holding over $11 trillion in assets on the Vanguard platform can now buy and sell regulated crypto ETFs. For years, Vanguard was the industry’s most visible holdout, publicly describing bitcoin as “too volatile,” “speculative,” and unsuitable for long-term portfolios. It even blocked client purchases of U.S. spot bitcoin ETFs on its own brokerage platform after those ETFs were approved. That wall has now come down.
It is difficult to overstate how consequential Vanguard’s entry truly is. Vanguard differs from giants like BlackRock because its influence is rooted in retirement systems, pensions, and long-term capital allocation. It oversees some of the deepest pools of passive, default capital in the world such as automatic 401(k) contributions. This is not fast money or speculative leverage. Once bitcoin begins to enter those default allocations at scale, the resulting demand becomes structural, price-insensitive, and enduring. Even a small migration of Vanguard’s capital base toward bitcoin exposure over time would represent a true integration of crypto into the global savings system.
The market reaction underscored that importance immediately. On its first day of availability, more than $1 billion of bitcoin ETF volume reportedly traded on Vanguard’s platform within the first 30 minutes, and total bitcoin ETF volume surpassed $5.1 billion for the day. Bitcoin itself jumped roughly 6% around the U.S. market open as the ban was lifted. The message was clear: longstanding access constraints, not just investor interest, had been a key bottleneck.
Just one day later, Bank of America formalized its own major policy shift. Its wealth-management arms — including Merrill, Bank of America Private Bank, and Merrill Edge — will now allow advisors to recommend a 1–4% allocation to digital assets for clients with the policy taking effect January 5, 2026. Until now, advisors across this entire network were prohibited from recommending crypto to clients in a formal portfolio context. That restriction is now gone.
This change carries substantial weight given the scale of Merrill’s distribution platform. Merrill is among the largest wirehouse platforms globally, with approximately $3.5 trillion in client assets and tens of thousands of financial advisors. These are not self-directed traders clicking “buy” in an app; rather, these decisions arise from formal portfolio reviews and fiduciary-style allocation discussions with high-net-worth and mass-affluent investors. What makes this development particularly significant is that it represents more than mere permission to transact—it constitutes institutional endorsement. By explicitly recommending up to a 4% allocation, Bank of America is repositioning digital assets from speculative curiosities to a formally recognized sleeve within a diversified portfolio, alongside private equity, real estate, and commodities. This marks a profound shift in how crypto is framed within mainstream portfolio construction.
Meanwhile, Charles Schwab — historically more neutral than hostile toward crypto — has taken the final step that turns access into direct ownership. At the recent Reuters Next conference, CEO Rick Wurster confirmed that Schwab plans to offer spot trading for Bitcoin and Ethereum in the first half of 2026, allowing clients to buy and hold crypto directly rather than through third-party ETFs. Schwab already oversees more than $11 trillion in client assets, so this move could open direct crypto access to tens of millions of investors who previously had no simple way to custody digital assets within their primary brokerage relationship.
If Vanguard unlocks latent demand among passive, retirement-focused investors, and Bank of America embeds crypto into formal wealth-management allocations, then Schwab’s forthcoming trading platform provides the cleanest on-ramp of all — no ETF wrapper, no external exchange, no additional accounts. Crypto may soon sit alongside stocks, bonds, and mutual funds on the dashboards of the largest household-name brokerages in America.
Viewed together, these developments represent far more than a series of isolated reversals. They mark a structural pivot by the largest gatekeepers of U.S. capital. Just two years ago, “institutional adoption” largely meant hedge funds, a handful of corporates, and a small group of adventurous RIAs. Today, there is a functioning pipeline from the world’s dominant index providers, the nation’s largest wirehouses, and the most entrenched brokerage platforms directly into bitcoin and crypto markets. Distribution, not ideology, is now the dominant force.
The implications for capital flows over the next year are difficult to overstate. Even modest allocations across these platforms translate into tens of billions of dollars of potential demand. A 1% shift within Vanguard’s ecosystem, a small percentage of Bank of America’s advisory assets adopting crypto sleeves, and incremental direct buying through Schwab could collectively unlock one of the largest new sources of structurally persistent inflows the crypto market has ever seen. What was once episodic and speculative demand is becoming systematic and institutionalized. As this infrastructure comes online, it has the potential to accelerate demand and emerge as a powerful structural catalyst for the next leg higher in crypto markets.
In Other News
Kevin Hasset, advisor to Coinbase who sits on the company’s Regulatory Advisory Council, has emerged as a frontrunner to be the next Fed Chair.
Texas becomes first US state to buy $10 million in bitcoin for strategic reserve.
Vanguard clients can now trade cryptoassets.
Bank of America will let Merrill, Private Bank, and Merrill Edge clients to allocate to crypto, ending years of adviser restrictions on recommending crypto products.
Disclaimer: This is not investment advice. The content is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice. Nothing contained constitutes a solicitation, recommendation, endorsement, or offer to buy or sell any securities or other financial instruments in this or in any other jurisdiction in which such solicitation or offer would be unlawful under the securities laws of such jurisdiction. All Content is information of a general nature and does not address the circumstances of any particular individual or entity. Opinions expressed are solely my own and do not express the views or opinions of Blockforce Capital.
Disclaimer: This is not investment advice. The content is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice. Nothing contained constitutes a solicitation, recommendation, endorsement, or offer to buy or sell any securities or other financial instruments in this or in any other jurisdiction in which such solicitation or offer would be unlawful under the securities laws of such jurisdiction. All Content is information of a general nature and does not address the circumstances of any particular individual or entity. Opinions expressed are solely my own and do not express the views or opinions of Blockforce Capital or Onramp Invest.
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