Bank of America has approved some of its customers to trade in bitcoin futures


July 19, 2021

Bank of America, the second-largest U.S. bank, has approved some of its customers to trade bitcoin (BTC, -1.09%) futures, according to two people familiar with the matter who spoke on condition of anonymity.

The bank, like most institutions, has been conservative in its approach to the cryptocurrency space, but it is now allowing some clients access to the cryptocurrency market due to the large margin requirements for trading futures, one of the sources said. Another source said some clients are setting up bitcoin futures exchanges, which are settled in cash, and one or two may already be online.

Some investment banks are reportedly allowing clients to invest in cryptocurrency products. In March, Goldman Sachs confirmed plans to restart its cryptocurrency trading desk after a three-year hiatus, and in May, the investment bank began buying and selling bitcoin futures as a block trade through CME Group, selecting Cumberland DRW as its trading partner.

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

Bank of America declined to comment.

Earlier this month, it was revealed that the Charlotte, North Carolina-based bank had created a team to focus on cryptocurrencies and related technologies. In 2018, Bank of America blocked financial advisers and clients from making bitcoin-related investments, but that policy has now changed.

CME bitcoin futures launched in 2017. In May, CME launched "micro-bitcoin" futures in an attempt to take advantage of the currency's rising price.

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

Total holdings in the bitcoin futures market stand at $11.3 billion, down 59 percent from a peak of $27.3 billion on April 13, according to Arcane Research.