Merrill Lynch bans clients, advisers from trading in bitcoin-related investments: WSJ

Merrill Lynch told employees last month not to offer clients Grayscale's Bitcoin Investment Trust (GBTC), one of the few financial instruments directly holding the digital coin.
Merrill Lynch told employees last month not to offer clients Grayscale's Bitcoin Investment Trust (GBTC), one of the few financial instruments directly holding the digital coin.PHOTO: REUTERS

NEW YORK (BLOOMBERG) - Bank of America Corp's Merrill Lynch told employees last month not to offer clients Grayscale's Bitcoin Investment Trust (GBTC), 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 (Jan 3).

GBTC is traded over the counter, rather than through a formal bourse like the New York Stock Exchange.

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 and CME Group. 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 does not 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.

Bitcoin has soared more than 1,300 per cent over the last 12 months with some market experts warning of a big speculative bubble.