BofA Includes Bitcoin Trust in Broader Ban on InvestmentsSmart Planet
Bank of America Corp.’s Merrill Lynch told employees last month not to offer clients Grayscale’s Bitcoin Investment Trust, one of the few financial instruments directly holding the digital coin, as the brokerage broadly eschews the virtual currency.
The firm -- already known to be refraining from offering bitcoin futures contracts -- told financial advisers not to pitch the fund or execute new client requests to buy into it, according to an excerpt of a Dec. 8 internal memo. The bank is willing to maintain existing positions in brokerage accounts, but not in fee-based advisory accounts.
The Wall Street Journal reported the decision earlier on Wednesday.
Wall Street firms have broken ranks in recent weeks over whether to facilitate customers’ bets on bitcoin amid widespread concern that it’s a bubble or that the cryptocurrency’s price is potentially susceptible to manipulation. Bank of America is among brokerages that have held off on offering the futures introduced last month by Cboe Global Markets Inc. and CME Group Inc. The bank issued its policy on the trust days before the initial futures contracts began trading on Dec. 10.
“The decision to close GBTC to new purchases is driven by concerns pertaining to suitability and eligibility standards of this product,” executives wrote in the memo.
The bank doesn’t offer retail clients any other bitcoin-linked products, according to a person with knowledge of the matter who asked not to be identified discussing company offerings.