Bank of America has begun clearing bitcoin futures

Bitcoin • July 16, 2021, 10:47AM EDT
UPDATED: July 16, 2021, 12:30PM EDT
The Block

Bank of America has entered the bitcoin futures trading game.

The bank is clearing cash-settled bitcoin futures, a type of contract that settles in US dollars rather than bitcoin itself, according to two sources. CoinDesk first reported the development Friday morning.

In a sense, the news isn't surprising; clearing cash-settled futures on an exchange like CME is similar to the trading of any other cash-settled product. 

Still, the news illustrates that Wall Street is warming up to the bitcoin market. Goldman Sachs relaunched its own cryptocurrency trading operation, offering clients exposure to bitcoin futures through trading partners like Galaxy Digital, as previously reported by CNBC. Goldman and Morgan Stanley have also announced initiatives that would offer bitcoin-tied products to some of their private wealth clients. 

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As for BofA, support of bitcoin futures would not be its first foray into the market. As previously reported by The Block, the bank launched a new research team dedicated to covering the crypto market. The new unit is being led by Alkesh Shah, who joined the bank in 2013, according to a memo seen by Bloomberg. 

The bitcoin futures market has cooled down in recent months alongside the price of cryptocurrencies. As per The Block's Data Dashboard, aggregate open interest across bitcoin futures markets stands at $11.8 billion, down from a high of around $27.6 billion in April. 

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Frank Chaparro is Host of The Scoop podcast and Director of Special Projects. He also writes a biweekly newsletter. Chaparro started his career at Business Insider, where he specialized in the intersection of digital assets and Wall Street, market structure, and financial technology. Soon after joining Business Insider out of Fordham University, Chaparro was interviewing top finance and tech executives, including billionaire Mark Cuban, “Flash Boys” star Brad Katsuyama, Cboe Global Markets CEO Ed Tilly, and New York Stock Exchange President Tom Farley. In 2018, he become a sought after reporter in the crypto world, interviewing luminaries such as Tyler Winklevoss, the cofounder of Gemini, Jeremy Allaire, the CEO of Circle, and Fundstrat head Tom Lee. For inquiries or tips, email [email protected].

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