Friday, October 19, 2018
   
Text Size

Site Search powered by Ajax

Bitcoin: Bank of America division bans investments

Merrill Lynch has banned clients from investing in a bitcoin fund.

Merrill Lynch

Bank of America Merrill Lynch banned clients from investing in one of bitcoin mogul Barry Silbert's top funds last month, according to a memo, Reuters news agency reported.

As of December 8, the Wall Street brokerage stopped approving new orders for the Bitcoin Investment Trust due to concerns about the "suitability and eligibility standards of this product," according to the memo sent to roughly 17,000 brokers at Merrill Lynch and Merrill Edge, a unit for clients who manage their own trades.

Bitcoin Investment Trust is run by Grayscale Investments, which is led by Silbert. A former Wall Street investment banker and prominent supporter of cryptocurrencies.

"We look forward to speaking with Merrill Lynch and addressing any questions or concerns they have about the Bitcoin Investment Trust," Silbert told Reuters. "We are unaware of any similar policies at other brokerage firms."

Warnings of a bubble 

Wall Street has taken a cautious approach to digital currencies, which are unregulated and have very volatile trading patterns. Last month, Chicago-based derivatives exchanges Cboe Global Markets and the CME Group launched bitcoin futures, but some banks and brokerages remain reluctant to trade them.

Millions of investors have piled into bitcoin and other digital currencies prompting warnings of a bubble from the likes of JPMorgan Chase Chief Executive Jamie Dimon, who has likened bitcoin to a "fraud" that will eventually blow up.

Shares in Bitcoin Investment Trust jumped over 1,550 percent last year, more than the 1,300 percent plus gain of bitcoin. The fund was created for investors seeking exposure to bitcoin and trades "over the counter" in less formal exchanges than those used for typical stocks.

Before last month's ban, clients of Merrill Lynch's brokerage and Merrill Edge were able to buy stakes in Bitcoin Investment Trust, which trade at a fraction of a bitcoin. The digital currency is currently valued at around $15,000.

Merrill Lynch brokerage clients with historical positions in the Bitcoin Investment Trust fund can maintain them, but clients with fee-based advisory accounts have to sell their holdings, according to the memo.


blog comments powered by Disqus

Subscribe via RSS or Email:

Saudi stocks plunge amid pressure o...

Read More

Yemeni president fires PM over poor...

Read More

'Davos in the Desert' faces more ca...

Read More

Khashoggi disappearance: Media comp...

Read More

Sudden jump in US interest rates pr...

Read More

Judge mulls slashing $290m award in...

Read More

Donation

Thanks to all of our supporters for your generosity and your encouragement of an independent press!

Enter Amount:

Featured_Author

Login






Login reminder Forgot login?

Subscribe to MWC News Alert

Email Address

Subscribe in a reader Facebok page Twitter page

Israel pounds Gaza

India's Kerala state devastated

Capturing life under apartheid