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Bitcoin Futures Approved for Some Bank of America Clients

Bitcoin Futures
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EDITOR NOTE: If you’re a financial newsphile, you’ve likely come across many traditional finance experts who held positions in bitcoin regardless of whether or not they believed in the long-term viability of the asset. For most of them, traditional assets likely comprised the bulk of their portfolios, with bitcoin and other highly speculative assets comprising only a small percentage of the mix--it’s the portion they’re allowed to gamble; one that promises a higher positive than negative payoff, So, Bank of America decided to enter the bitcoin futures game--the only regulated part of the entire crypto market, by the way. Why not? There’s lots of profit to reap on their part as a dealer. Does it add value to customers? That depends on the smarts of the customer. A with every TBTF dealer selling you speculative assets with no intrinsic value--if you make money, they make money; if you lose everything as a result of their offerings, they still make money, or they get bailed out.

Bank of America, the second-largest bank in the U.S., has approved the trading of bitcoin futures for some clients, according to two people with knowledge of the matter who spoke on condition of anonymity.

Like most institutions, the bank has been conservative in its approach to the crypto sector, but due to the large amount of margin required to trade the futures, it is now allowing some clients to access the crypto market, one of the sources said. Some clients are setting up to trade bitcoin futures, which are cash settled, and one or two may have already gone live, the other source said.

A number of investment banks are reportedly allowing clients to invest in crypto products. In March, Goldman Sachs confirmed plans to relaunch its cryptocurrency trading desk after a three-year hiatus, and in May, the investment bank started buying and selling bitcoin futures in block trades through Chicago Mercantile Exchange (CME) Group, using Cumberland DRW as its trading partner.

Bank of America will also be using CME futures, according to one of the sources.

Bank of America declined to comment.

Earlier this month, it emerged that the Charlotte, N.C.-based bank had created a team dedicated to researching cryptocurrencies and related technologies. In 2018, Bank of America blocked financial advisers and clients from trading in bitcoin-related investments but that policy has now changed. 

CME bitcoin futures were launched in 2017. In May, the CME launched its “Micro Bitcoin” futures products in an attempt to capitalize on bitcoin’s price rally. 

Related: First Midwest Bank Trust Division Holding 29.5K Shares of Grayscale Bitcoin Trust

Earlier this year, CME took the prime spot on the list of the biggest bitcoin futures trading platforms, indicating a continued rise in institutional participation. 

The total open interest in the bitcoin futures market is sitting at $11.3 billion, down 59% from its April 13 peak of $27.3 billion, according to Arcane Research.

Original post from Yahoo! Finance

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