Economy

Merrill Lynch bars trading of bitcoin fund, futures

Merrill Lynch bars trading of bitcoin fund, futures”

Advisors will no longer be allowed to pitch investments tied to the cryptocurrency nor execute requests from clients to trade in the over-the-counter Grayscale Investment Trust Bitcoin fund, a person familiar with the matter tells the Journal.

Per the email: "We look forward to speaking with Merrill Lynch and addressing any questions or concerns they have about Bitcoin Investment Trust".

The policy was put in place on December 8, right before the launch of the first USA bitcoin futures, the report said, citing a person familiar with the matter.

"The decision to close GBTC to new purchases is driven by concerns pertaining to suitability and eligibility standards of this product", according to an internal memo reviewed by Journal, referring to the Grayscale fund's trading symbol.

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.

Bitcoin Investment Trust is run by Grayscale Investments, which is led by Silbert.

It was created for investors seeking exposure to bitcoin through a traditional investment vehicle, and trades over the counter. The United States-based brokerage arm of financial services company UBS has also moved to prevent trading of Bitcoin-related products, and JPMorgan Chase and Citigroup both chose not to allow clients to access Bitcoin futures.

Barry Silbert is a well-known figure in the cryptocurrency industry. Its stock trades at about $50 after climbing 40% in the a year ago. Many prominent bankers such as JP Morgan's Jamie Dimon has called it a "fraud" and warned that it is an investment bubble waiting to burst anytime.

Reaction among advisers at Merrill was mixed, with some welcoming it as "prudent" and others ruing "missed trading opportunities". Advisers say clients are calling about investing in bitcoin, demand that some advisers want to satisfy. "I think it's a very good idea", said one Merrill adviser of the brokerage's decision. The firm "made an assessment that there's too much risk".

Individual retail traders are flooding apps that make it easy to buy and sell things like ethereum or bitcoin.



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