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Bank of America opens Bitcoin futures trading to its clients

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Bank of America (BofA) has established Bitcoin futures trading for some of its clients.

Despite its fairly conservative approach in response to cryptocurrencies, the second-largest bank in the United States has now given some of its clients the green light to access such digital assets due to the amount of margin required to trade futures.

While some of the bank’s clients are now setting up Bitcoin futures accounts, which are settled in cash, one or two clients may have already started trading.

In 2018, BofA used to block its clients and financial advisers from trading Bitcoin-related investments, but that policy has now changed. The bank will use CME futures, which was established in 2017 and has become one of the largest Bitcoin futures trading platforms.

The bank has been wary of crypto assets for some time. In March, one of the bank’s analysts stated that the cryptocurrency Bitcoin has not been convincing as a hedge of inflation.

However, earlier this month, BofA formed a new team to investigate cryptocurrencies. According to an internal memo dated July 8, the bank established a crypto investigation team to investigate institutional interest in crypto tokens.

“Cryptocurrencies and digital assets constitute one of the fastest growing emerging technology ecosystems,” said Candace Browning, director of BofA Global Research, addressing the memorandum to employees and partners of Bank of America’s Merrill Lynch Wealth Management division. .

Wall street adopt bitcoin

Pressure is mounting on Wall Street banks to accept Bitcoin as a legitimate asset class. Leading banks in the US embrace Bitcoin, which is an important stamp of legitimacy for the nascent asset class.

In March, Goldman Sachs restarted its Bitcoin trading desk after a three-year hiatus and began offering Bitcoin futures and non-deliverable forwards to its clients. The bank’s decision to relaunch its crypto trading desk comes as institutions’ interest in Bitcoin continues to grow.

In March, investment bank Morgan Stanley became the first major US financial institution to allow wealthy management clients to access Bitcoin funds.

JPMorgan Chase also announced in April that it was preparing to allow some of its clients to invest in actively managed crypto funds.

Then, in early May, crypto custody firm NYDIG partnered with financial technology giant Fidelity National Information Services to enable US banks to provide Bitcoin trading services to their clients. Hundreds of banks sign up for the program to allow their clients to buy, hold and sell Bitcoin through their existing accounts.

On May 18, Wells Fargo, the fourth largest bank in the US, announced that it would introduce professionally managed crypto funds to wealthier clients. The bank stated that the risks associated with cryptocurrencies meant that it would favor “qualified investors.”

Banks are now looking to exchange Bitcoin services because they see their clients sending dollars to Kraken, Coinbase, and other crypto exchanges.

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