Merrill Lynch joins roll-call of Wall St players banning bitcoin

Bank of America Merrill Lynch is the latest global financial player that has banned bitcoin buying across the firm, the Wall Street Journal has reported.

The firm’s 17,000 financial advisers were told to stop trading in Grayscale Investments’ Bitcoin Investment Trust (BIT), as directed by an internal memo dated 8 December, and seen both by the paper and the Reuters news agency.

The Grayscale trust is the main way for individual investors to gain exposure to the digital currency, it says, stating that the policy “applies firmwide and includes self-directed accounts”.

Advisers managing fee-based accounts must close existing positions, a source told the paper, though Reuters said that non-fee based Merrill Lynch clients with historic positions in BIT can maintain them.

Reaction among advisers at Merrill was mixed, with some welcoming it as “prudent” and others ruing “missed trading opportunities”.

“It’s a joke,” one veteran broker was quoted as saying. If anything, he said, “I wish we could short it.”

Merrill joins UBS Group in banning advisers from trading in bitcoin-related products, alongside JP Morgan Chase, whose chief executive Jamie Dimon famously called bitcoin “a fraud” last year.

Citigroup and Royal Bank of Canada have also banned trading in bitcoin on behalf of clients.

It is a blow for so-called “bitcoin mogul” Barry Silbert (pictured above), for whom BIT is his top fund.

Former Wall St 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.”

Shares in BIT jumped 1500% last year, outperforming bitcoin itself at 1300%.

 

ABOUT THE AUTHOR
Eugene Costello
Eugene Costello has been a journalist for some 20 years, and has written for a wide variety of UK and international newspapers and magazines.

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