What does the entry of Vanguard Group, Bank of America, and Charles Schwab into crypto mean?

Source: Galaxy; Compiled by: Jinse Finance

Last Tuesday, Bank of America (BofA) announced that starting in January 2026, its wealth 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 (including Merrill Lynch, Bank of America Private Bank, and Merrill Lynch). Meanwhile, Bank of America's Chief Investment Officer, Chris Hyzy, recommended allocating 1% to 4% of portfolios to Bitcoin, echoing Morgan Stanley's recommendation in October.

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

Meanwhile, Charles Schwab has set a timeline for launching spot trading in Bitcoin and Ethereum, aiming for mid-2026. Schwab CEO Rick Wurster revealed the company's plans in a CNBC interview on July 18. Galaxy's View: The story of institutional adoption of cryptocurrencies continues. In our October 17 briefing, we reported that Morgan Stanley removed restrictions on its financial advisors' use of crypto funds, and Bank of America is following suit; we also reported that Vanguard plans to offer crypto funds to its clients, and Citigroup plans to launch a cryptocurrency custody service in 2026. Three of the four major U.S. brokerage firms have now lifted restrictions on cryptocurrency investments: Bank of America lifted restrictions this week, Morgan Stanley lifted them in October, and Wells Fargo Advisors added a spot Bitcoin ETF to its brokerage platform's recommendation list months ago. The last firm to remain is UBS Financial Services. While we hear little about UBS in the cryptocurrency space, the company offers limited and conditional access to cryptocurrency investments to select clients. Perhaps UBS's reluctance to ease restrictions stems from its parent company's Swiss headquarters, which may face further regulatory hurdles, and the need to consider its global operations and its focus on non-U.S. clients. In addition to the major brokerages, Vanguard, the world's second-largest asset manager, has also begun allowing clients to trade cryptocurrency ETFs and mutual funds. This move is reportedly in the works since late September, a stark contrast to the company's previous skepticism towards cryptocurrencies. When the U.S. spot Bitcoin ETF launched in 2024, Vanguard told Business Insider: "While we continue to evaluate our brokerage services and assess the likelihood of new products entering the market, the spot Bitcoin ETF will not be available for purchase on the Vanguard platform. We also have no plans to offer the Vanguard Bitcoin ETF or other cryptocurrency-related products." "We believe these products are not aligned with our focus on asset classes such as equities, bonds, and cash, which Vanguard considers the foundation for building a balanced, long-term portfolio." These shifts in attitude stemmed primarily from client demand. As cryptocurrencies gain regulatory approval and become increasingly integrated into the traditional financial system, investors are increasingly eager to access related investment opportunities to avoid missing out on potential gains. Competition intensifies as more companies open trading channels, especially with back-end supply no longer being a barrier. The U.S. Securities and Exchange Commission (SEC) has streamlined the listing process for cryptocurrency ETFs; a wider variety of products are available, providing investors with more choices; and the growth in assets under management has improved liquidity. Vanguard not only allows trading in spot Bitcoin ETFs but also some other cryptocurrency funds, and may support more regulatory-compliant cryptocurrency products, while Bank of America (BofA) only allowed trading in four spot Bitcoin ETFs in January. It's worth noting that Vanguard has not recommended any specific Bitcoin portfolio allocation. Its decision to allow trading in cryptocurrency funds reflects a philosophy of providing investors with more choices. As we previously pointed out, removing these distribution bottlenecks in the US financial market could unlock approximately $30 trillion in assets managed by 300,000 financial advisors. Bank of America reportedly serves approximately 70 million clients and manages over $2 trillion in assets; Vanguard manages 50 million accounts with $11 trillion in assets. Combined, the market opportunity is as high as $13 trillion. Even allocating only 1% of these funds could bring in approximately $130 billion in inflows, more than doubling the total inflows into US spot cryptocurrency ETFs since their inception. Bitcoin launched first, and Ethereum and other altcoins are likely to follow suit on platforms that haven't yet embraced them. As we mentioned in our previous briefing, these flows tend to be more stable and less sensitive to short-term fluctuations, which in turn can reduce market volatility and attract more institutional capital.