Bank of America Recommends Allocating 1-4% of Portfolios to Crypto

Week of December 9 - 15, 2025

Bank of America has issued official guidance recommending that its high-net-worth clients allocate 1–4% of their investment portfolios to cryptocurrencies. The bank also plans to release a comprehensive research report covering investment opportunities in Bitcoin (BTC).

Coinbase published an analysis suggesting that a “December Recovery” could occur this month, driven by the high likelihood that the U.S. Federal Reserve (Fed) will cut interest rates in its final meeting of the year. In addition, a potential end to QT could bring more liquidity back into the system, helping support Bitcoin’s price.

Bitwise believes the risk of Strategy being forced to sell its Bitcoin holdings remains low, noting that the fund’s structure does not require short-term selling. Regarding concerns that MSCI may remove DAT stocks from its index, Bitwise estimates a 75% chance of removal, though the sharp price drop on October 10 may have already priced in this negative event.

Data from the past week shows that Spot Ethereum ETFs saw roughly USD 360 million in net inflows, while Spot Bitcoin ETFs saw only about USD 120 million, indicating that institutional investors are currently placing greater weight on Ethereum over Bitcoin.

CoinShares released an analysis stating that the financial position of Tether, issuer of USDT, remains secure despite holding around 30% in risk assets. The company currently has a USD 6.8 billion surplus between total assets and liabilities, providing a strong buffer against volatility.

JPMorgan estimates the latest average cost of Bitcoin production at USD 90,000, down from USD 94,000 the previous month. If market prices remain below this level, Bitcoin miners may face pressure to sell their holdings. The bank also noted that developments surrounding Strategy’s stock continue to influence institutional investor sentiment.

Grayscale Research expects Bitcoin to potentially reach a new all-time high in 2026, adding that corrections of 25% or more during a bull market are normal and do not necessarily signal a trend reversal. The firm also noted that the market’s evolving structure may mean the familiar four-year cycle could become less relevant going forward.

Technical Analysis

Bitcoin (BTC)

Bitcoin (BTC) is showing a sideway-up movement, forming higher lows, which indicates a potential return to an upward trend. To confirm this momentum, the price will need to break above the USD 94,000 resistance level. However, there is still a risk of further downside, with support and the stop-loss level positioned around USD 80,000.

Support: 2,600,000 THB / 80,000 USD
Resistance: 3,000,000 THB / 94,000 USD

Ethereum (ETH)

Ethereum (ETH) recently tested the USD 3,300 resistance level but failed to break through, leading to a pullback as the market consolidates strength for a potential move higher. Support and the stop-loss level remain at USD 2,600. A buying opportunity may arise if the price can break above the resistance, signaling a reversal back into an uptrend.

Support: 85,000 THB / 2,600 USD
Resistance: 104,000 THB / 3,300 USD

Terra Classic (LUNC)

Terra Classic (LUNC) delivered an 80.19% return over the past week. The price has surged sharply and is now undergoing a pullback. Traders should be cautious of heightened volatility and set a stop-loss if the price breaks below USD 0.000047. The short-term take-profit level is around USD 0.000081. Short-term trading is recommended only, as the fundamental outlook remains unclear.

Support: 0.0015 THB / 0.000047 USD
Resistance: 0.0026 THB / 0.000081 USD

Terra (LUNA)

Terra (LUNA) delivered a 41.89% return over the past week, with the price attempting to reverse into an uptrend. Look for entry opportunities as long as the price stays above USD 0.1680, and set a stop-loss if it falls below this level. The short-term resistance for taking profit is at USD 0.1131. Extra caution is advised when trading, as the fundamental factors remain uncertain.

Support: 3.60 THB / 0.1131 USD
Resistance: 5.20 THB / 0.1680 USD

Investment Trends

The price of Bitcoin (BTC) has been moving sideways after the market priced in expectations that the U.S. Federal Reserve’s FOMC meeting on Wednesday, December 10, 2025, may result in a 0.25% interest rate cut. However, attention remains on the post-meeting statement, which will signal the direction of monetary policy for next year.

The cryptocurrency market is also facing pressure from concerns that Strategy could be removed from the MSCI index, which may affect other publicly listed companies that hold crypto as part of their investment portfolios. This uncertainty has reduced institutional buying interest, including inflows through ETFs. If the situation remains unclear, the market may continue to move sideways until a new catalyst emerges, such as potential Bitcoin purchases by the U.S. federal government for its Strategic Reserve.

However, there is a possibility that the market has already priced in the MSCI removal risk for Strategy since the major liquidation event on October 10. This may limit further downside, and several research firms believe Strategy is unlikely to be forced to sell its Bitcoin holdings in the short to medium term.

As for other publicly traded companies holding crypto, there have been no signs of large-scale selling yet, but this still represents a risk that could exert downward pressure on the market. If the DAT strategy fails to gain acceptance, companies that previously invested in crypto may consider selling their holdings.

Investment Strategy: Continue focusing on large-cap cryptocurrencies only, and maintain disciplined stop-loss levels until there is more clarity regarding the situation with Strategy.

References

Topics: Crypto Weekly

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