What does it mean that Vanguard Group, Bank of America, and Charles Schwab are entering crypto?

Source: Galaxy; Translated by Jinse 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 US spot Bitcoin ETFs will be available on the bank’s wealth management platforms, including Merrill Lynch, Bank of America Private Bank, and Merrill Edge. Meanwhile, BofA Chief Investment Officer Chris Hyzy recommended allocating 1% to 4% of portfolios to Bitcoin, echoing Morgan Stanley’s advice from October.

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

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

Galaxy’s View:

The story of institutional crypto adoption continues.

In our October 17 briefing, we reported that Morgan Stanley had lifted restrictions on its financial advisors using crypto funds, and Bank of America was following suit. We also reported that Vanguard planned to offer crypto funds to its clients, and Citigroup aimed to launch crypto custody services in 2026.

Three of the four largest US brokerages have now lifted restrictions on crypto investments: Bank of America removed restrictions this week, Morgan Stanley did so in October, and Wells Fargo Advisors added spot Bitcoin ETFs to its recommended list for brokerage platforms several months ago. The only one yet to lift restrictions is UBS Financial Services. Although we rarely hear about UBS in the crypto space, the company offers limited and conditional crypto investment channels to select clients. UBS’s reluctance may stem from its parent company’s Swiss headquarters, which may face more regulatory hurdles, and the need to consider its global business and focus on non-US clients.

Beyond major brokerages, the world’s second-largest asset manager, Vanguard, has also started allowing clients to trade crypto ETFs and mutual funds. Reportedly, preparations for this move began as early as late September, a stark contrast to the company’s previously skeptical stance on crypto. When US spot Bitcoin ETFs launched in 2024, Vanguard told Business Insider:

“While we continually evaluate our brokerage offering and assess new products entering the market, spot Bitcoin ETFs will not be available for purchase on the Vanguard platform. We have no plans to offer a Vanguard Bitcoin ETF or other crypto-related products.”

“We believe these products do not align with our focus on asset classes such as equities, bonds, and cash, which Vanguard views as the building blocks of a balanced, long-term investment portfolio.”

These attitude shifts are driven primarily by client demand. As crypto gains regulatory acceptance and becomes increasingly integrated into traditional finance, investors are seeking access to related investment opportunities to avoid missing out on potential gains. As more companies open up trading channels, competition intensifies, especially now that back-end supply is no longer a barrier. The US Securities and Exchange Commission (SEC) has streamlined the listing process for crypto ETFs; the variety of products has increased, giving investors more choices; and the growth in assets under management has boosted liquidity.

Vanguard now allows trading not only spot Bitcoin ETFs but also some other crypto funds, and may support more regulated crypto products in the future. In contrast, Bank of America will only allow trading of four spot Bitcoin ETFs in January. Notably, Vanguard has not recommended any specific Bitcoin portfolio allocation. Its decision to allow crypto fund trading reflects a philosophy of offering investors more choices.

As we have noted before, removing these distribution bottlenecks in the US financial markets could unlock around $30 trillion in assets managed by 300,000 financial advisors. Reportedly, Bank of America serves about 70 million clients and manages over $2 trillion in assets, while Vanguard manages 50 million accounts with $11 trillion in assets. Together, the market opportunity amounts to $13 trillion. Even a 1% allocation could bring in about $130 billion in inflows, more than doubling the total inflow to US spot crypto ETFs since their inception.

Bitcoin is leading the way, and Ethereum and other altcoins are likely to follow on platforms where they have not yet been adopted. 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.