Bitcoin BLOW: Mainstream hopes could COLLAPSE as Bank of America BANS cryptocurrencies
THE brokerage arm of the Bank of America has blocked staff and clients from trading in all bitcoin-related investments.
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Merrill Lynch’s decision to block access to the fund comes after concerns were raised by bank chiefs over the "suitability and eligibility standards of this product”, according to an internal memo circulated to approximately 17,000 advisers.
The ban extends to clients trading in Grayscale's Bitcoin Investment Trust, a fund led by bitcoin entrepreneur Barry Silbert.
According to the Wall Street Journal, Merrill Lynch – which manages $2.2trillion in client assets – has extended a ban on recently launched bitcoin futures contracts which made headlines across the world, with an insider adding Merrill Lynch put the policy in place on December 8, just two days prior to the launch of bitcoin futures by CBOE.
The Wall Street Journal's source also said that existing bitcoin funds cannot be held in fee-based advisory accounts, but can be maintained in brokerage accounts.
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Mr Silbert, a former Wall Street investment banker, told Reuters: "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."
The move could shatter ambitions for those hoping support from the mainstream finance world would increase bitcoin's legitimacy and rate of adoption.
In November last year, US exchange giant NASDAQ told selected market participants it plans to launch a bitcoin future at some point in 2018.
Alessio Bruni of Bitcoin wallet provider Luno.com said Nasdaq's involvement will bring more legitimacy to digital currencies.
Mr Bruni told Express.co.uk at the time: "The vast majority of bitcoin is traded on various platforms, which are incorporated in jurisdictions where bitcoin isn’t currently regulated.
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"Bringing bitcoin (or bitcoin futures contracts) to larger, regulated exchanges like Nasdaq, will ultimately bring more legitimacy to digital currencies and with it, an increase in institutional investor activity.
Nicholas Gregory, CEO of CommerceBlock was similarly optimistic, telling Express.co.uk: “This is a huge stamp of approval for bitcoin and the next big step on the road to its global adoption, something I am convinced is inevitable."
However Merrill Lynch's move now casts doubt on the claim that 2018 would be the year of bitcoin's mainstream adoption.
