Every major firm now finally allows Bitcoin, yet an “invisible” compliance layer is quietly blocking your access

Vanguard’s reversal this week closed the last major holdout. The firm opened its brokerage to third-party crypto ETFs and mutual funds tied to BTC, ETH, XRP, and SOL, while still refusing to launch its own crypto funds or touch memecoin products.

That shift matters because Vanguard was the last major, brand-name US asset manager with a blanket ban on Bitcoin exposure through listed products.

Fidelity has its own spot BTC ETF and in-app retail crypto trading. Schwab offers spot Bitcoin funds and options on spot BTC ETFs and is preparing for full spot crypto trading by 2026.

Bank of America, Morgan Stanley, Wells Fargo, and UBS now all offer spot Bitcoin ETFs in their wealth channels, with BofA even telling advisers to consider a 1% to 4% crypto allocation.

Among the national, mass-market platforms you’d name in the same breath as Vanguard, the debate has moved from “allow it or not?” to “how much, to which clients and in what wrapper?”

There are no Vanguard-style outright bans left at the big names. What remains are soft speed bumps, structural barriers embedded in how products are packaged, who’s allowed to use them, and which defaults get applied when advisers or algorithms make allocation decisions.

These soft bans don’t appear as policy statements, but they keep trillions in US retirement and insurance funds at arm’s length from Bitcoin.

The 401(k) menu problem: policy shifted, platforms didn’t

One barrier lives in workplace retirement plans. The Department of Labor rescinded its 2022 “extreme care” warning and returned to a neutral stance on crypto in 401(k)s, but that didn’t flip the menus to pro-Bitcoin.

Most plan sponsors still don’t offer spot BTC ETFs as a standard option. Barron’s notes that even after the policy shift, Bitcoin ETFs remain “rarely available in standard 401(k) plans.” Fidelity’s Digital Assets Account lets employers add bitcoin to a 401(k), but only if the employer opts in, and allocations are capped.

For most salaried workers, retirement savings are still walled off from direct Bitcoin exposure unless there’s a brokerage window and a willing sponsor.

The mechanics work like this: a benefits consultant proposes a menu of 15 to 25 funds covering large-cap, small-cap, international equity, bonds, and target-date strategies.

Spot BTC ETFs are technically eligible, but including one means the plan fiduciary must affirmatively determine that bitcoin serves participants’ interests and document that decision in writing.

Legal counsel and consultants are still telling fiduciaries that crypto in 401(k)s is high-risk and should be approached cautiously, even though the DOL no longer singles it out.

The result is a status quo bias: unless someone at the sponsor company actively pushes for a bitcoin option, the menu defaults to the same equity and fixed-income lineup that’s been in place for years.

That creates a structural mismatch. Retail investors who use Robinhood or Coinbase can buy Bitcoin freely in taxable accounts. The same people, when they contribute to a 401(k), are typically locked into a menu that maxes out at a “growth” target-date fund with zero crypto exposure.

The policy environment has shifted to neutral, but the infrastructure consisting of plan menus, record-keeper integrations, and fiduciary appetite hasn’t caught up.

Risk-tier gates and wealth minimums: who gets access

Another soft barrier is risk-tier gatekeeping at big wealth platforms. Morgan Stanley only recently dropped its requirement that clients be “aggressive” investors with at least $1.5 million before they could access crypto funds. As of October, it’s opening crypto funds and ETFs to all its wealth clients, including retirement accounts.

Merrill Lynch still restricts spot Bitcoin ETFs to “eligible” ultra-high-net-worth clients, defined as roughly $10 million in assets. UBS offers spot BTC ETFs only to “eligible” wealth clients rather than every retail account.

Bank of America has gone the furthest in normalizing crypto allocations, telling advisers to add 1% to 4% to their crypto allocations across Merrill and the private bank. However, that guidance is still framed for wealth clients who already have advisers and sizable portfolios.

In practice, that means the self-directed Robinhood-style crowd can buy Bitcoin ETFs freely, while many “mass affluent” households in legacy advice channels only get crypto if their adviser is comfortable and their risk score is high enough.

The distinction isn’t just about net worth, but it’s about which distribution channel investors are in.
If users self-custody or trade through a discount brokerage, Bitcoin is one click away. If investors are in a managed account at a wirehouse, they need an adviser override and a risk tolerance that clears internal compliance hurdles.

The tiers also create bifurcation within the same firm. At Morgan Stanley, a self-directed E*TRADE client can buy BlackRock’s IBIT without restriction. In contrast, a wealth-management client at the same firm needed an aggressive risk rating and $1.5 million by October.

At Merrill, retail clients in the self-directed CMA can access spot bitcoin ETFs. Still, Edge clients with smaller balances are steered toward thematic equity funds or Bitcoin-proxy stocks like Coinbase and Strategy.

Product design and default allocations: the robo nudge

Robo-advisors act as a quiet filter. Betterment and Wealthfront both now support Bitcoin and Ethereum ETFs, but they’re typically offered as a small satellite sleeve rather than a core holding.

Betterment’s “Crypto ETF portfolio” is explicitly pitched as offering “limited exposure” via BTC and ETH ETFs, typically accounting for a low single-digit percentage of the overall portfolio.

Wealthfront treats Bitcoin and Ethereum ETFs as optional holdings and only recently shifted new flows toward mainstream tickers like IBIT and ETHA. The default portfolios are still stock-and-bond heavy.

The upshot is that a typical hands-off robo client ends up with little or no bitcoin unless they actively override the default allocation.

This matters because robo-advisors are built around defaults. Most clients accept the recommended portfolio without customization.

If the algorithm allocates 2% to a crypto sleeve and 98% to equities and bonds, that’s what the client gets. If the default is zero crypto unless the client affirmatively opts in, most clients will have zero crypto.

Product type is another partial barrier. At firms like Charles Schwab, customers can research and buy crypto ETPs and thematic equity ETFs, but direct spot trading of Bitcoin is still “not currently available.”

Schwab says it plans to add spot crypto trading once the regulatory environment settles, with management guiding to a launch sometime around 2026. That’s fine if investors are happy with IBIT or other ETFs, but it’s still a structural nudge away from self-custody and toward wrapped exposure.

Insurance and annuity channels: the slowest lane

Insurance and annuity channels are another slow lane. SECURE 2.0 and related tax guidance are nudging insurers to use ETFs in variable annuity separate accounts. However, industry and law-firm commentary still frames this mostly in terms of traditional stock and bond ETFs, not Bitcoin.

Major variable annuity platforms aren’t advertising spot Bitcoin ETFs as standard subaccounts. Menus are still dominated by equity, fixed-income, and target-date strategies.

That effectively keeps trillions in insurance-wrapped retirement money out of BTC for now, even though nothing technically stops insurers from adding a Bitcoin ETF sleeve.

Variable annuities pool client premiums and allocate them across subaccounts that track mutual funds or ETFs. The insurer chooses which funds to make available, and the client picks from that menu.

Adding a Bitcoin ETF subaccount requires the insurance company to negotiate fees with the ETF issuer, clear internal compliance, and decide that offering crypto exposure serves policyholders’ interests and won’t trigger regulatory blowback.

Most insurers haven’t made that call yet, so the menu defaults to the same equity and bond subaccounts that have been available for decades.

The cultural and compliance layer

Finally, there’s the cultural and compliance layer. Even with the DOL’s reversal, benefits lawyers and consultants are still telling plan fiduciaries that crypto in 401(k)s is legally high-risk and should be approached with extreme caution.

Barron’s and MarketWatch both note that many advisors still view Bitcoin as speculative and suggest allocations of only 1% to 3%, even where ETFs are available, which effectively serves as a de facto soft cap.

Some platforms remain structurally biased toward indirect exposure: Schwab’s crypto education emphasizes ETPs and thematic stocks, not direct coins, steering conservative clients toward “picks and shovels” or diversified funds rather than owning BTC itself.

This is the layer that doesn’t show up in product availability grids but determines what actually happens in practice.

A fiduciary can add a Bitcoin ETF to a 401(k) menu, but if the benefits consultant tells the board that doing so will invite scrutiny and increase litigation risk, the board will choose not to.

An adviser can recommend a 5% Bitcoin allocation, but if the compliance desk flags it as outside the client’s risk tolerance band, the allocation is trimmed to 1% or removed entirely.

The end state is a market where Bitcoin is technically available everywhere but practically available only to clients who know to ask for it, have the risk tolerance to clear compliance gates, and are using platforms that treat crypto as a core asset class rather than a speculative add-on.

The big outright bans are gone. What’s left is a soft infrastructure of defaults, gates, and nudges that keeps most US retirement money in the same equity-and-bond allocations it’s always had.