‘Too big to fail’ Wall Street giants were always skeptical about the exponentially growing crypto economy. Now, Bank of America Merrill Lynch is separating itself from all its dealings in cryptocurrencies.
Last month, Bank of America Merrill Lynch banned its clients from investing in the Bitcoin Investment Trust, one of the top Bitcoin funds available in the market, according to a recent report by Reuters.
The internal memo issued by the Wall Street brokerage was sent to roughly 17,000 brokers at Merrill Lynch and Merrill Edge, a unit for clients who manage their own trades, and the new policies were enforced from December 8, only a couple of days before the launch of the first Bitcoin futures.
Referring to the Bitcoin Investment Fund, a section of the memo reads: “The decision to close GBTC to new purchases is driven by concerns pertaining to suitability and eligibility standards of this product.”
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The memo also mentioned that clients with historic positions in the Bitcoin Investment Trust fund will be allowed to maintain them, whereas clients with fee-based advisory accounts will have to sell their GBTC holdings.
Bitcoin Investment Fund is one of the cryptocurrency funds offered by Grayscale Investments, which also offers trust funds in Ethereum Classic and the privacy coin Zcash. This firm is lead by Bitcoin mogul Barry Silbert, a former Wall Street investment banker.
Responding to an email sent by Reuters, Mr. Silbert wrote: “We look forward to speaking with Merrill Lynch and addressing any questions or concerns they have about the Bitcoin Investment Trust.”
“We are unaware of any similar policies at other brokerage firms,” he added.
With the rise in Bitcoin’s price, Bitcoin Investment Trust’s shares jumped over 1,550 percent last year, which is more than the 1,300 percent gain of Bitcoin itself.
In spite of the constant criticisms of Bitcoin by Wall Street personalities, the digital coin made its debut in the formal market as two major stock exchanges, CBOE and CME Group, introduced Bitcoin futures in December ‘17.