Bank of America Takes First Step Into Bitcoin-Backed Lending

• Bank of America plans a credit product using Bitcoin as collateral for loans.
• The product lets Bitcoin holders access liquidity without selling their digital assets.

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Bank of America is taking its first steps into Bitcoin-backed lending, working on a credit product that lets clients post BTC as collateral. It marks a noticeable turn from the usual stance of traditional banks, treating digital assets not merely as risky bets but as collateral that can actually provide usable liquidity.

The scheme allows Bitcoin holders to obtain cash loans without having to relinquish ownership of their assets, a mechanism long known in the crypto market, now being adopted by major financial institutions.

Bank of America Signals BTC’s Role in Lending

Broadly speaking, the collateralized Bitcoin will be placed in a supervised custodian system, while the loan value is determined by a certain portion of the BTC value. Volatility risk remains a factor, as sharp price swings could trigger collateral adjustment obligations. Nevertheless, this approach demonstrates how major banks are beginning to feel comfortable managing such risks within a more formal credit framework.

The global banking industry is exploring ways to connect digital assets with established financial services. Furthermore, the interest of high-net-worth clients in accessing liquidity without selling their crypto assets is also encouraging banks to take steps previously considered too bold.

A sense of caution remains. This product isn’t positioned as a mass service, but rather as a scalable offering for a specific segment. Nevertheless, the signal is clear: Bitcoin is starting to be treated as an asset that can be operated on a balance sheet, not simply held in a digital wallet.

Earlier this December, Bank of America changed its digital asset strategy by allowing wealth management advisors to provide crypto investment recommendations to clients. Starting in January 2026, advisors on platforms like Merrill and Bank of America Private Bank will be able to recommend allocating one to four percent of their portfolios to crypto through a major Bitcoin ETF. This policy marks a significant shift, as previously, advisors’ roles were limited to passively responding to client requests.

This institutional view was also reflected in our August 10 report, where Bank of America predicted that 99% of existing crypto tokens would disappear within the next decade. Tokenization is expected to reshape the financial landscape, leaving tokens with real value and institutional support.

Further back, in mid-June, we highlighted Bank of America’s statement equating Bitcoin with the internet and electricity as a transformative innovation.

As of press time, BTC is trading at about $92,242, up 2.52% over the last 24 hours with $7.07 billion in daily spot trading volume and $59.51 billion in open interest.

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