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Bank of America Approves Bitcoin Futures Trading for Some Clients: Sources

Clients are in the process of being set up, with some already live, according to one of two sources.

Updated May 9, 2023, 3:21 a.m. Published Jul 16, 2021, 12:45 p.m.

Bank of America, the second-largest bank in the U.S., has approved the trading of bitcoin futures for some clients, according to two people with knowledge of the matter who spoke on condition of anonymity.

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Like most institutions, the bank has been conservative in its approach to the crypto sector, but due to the large amount of margin required to trade the futures, it is now allowing some clients to access the crypto market, one of the sources said. Some clients are setting up to trade bitcoin futures, which are cash settled, and one or two may have already gone live, the other source said.

A number of investment banks are reportedly allowing clients to invest in crypto products. In March, Goldman Sachs confirmed plans to relaunch its cryptocurrency trading desk after a three-year hiatus, and in May, the investment bank started buying and selling bitcoin futures in block trades through Chicago Mercantile Exchange (CME) Group, using Cumberland DRW as its trading partner.

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Bank of America will also be using CME futures, according to one of the sources.

Bank of America declined to comment.

Earlier this month, it emerged that the Charlotte, N.C.-based bank had created a team dedicated to researching cryptocurrencies and related technologies. In 2018, Bank of America blocked financial advisers and clients from trading in bitcoin-related investments but that policy has now changed.

CME bitcoin futures were launched in 2017. In May, the CME launched its “Micro Bitcoin” futures products in an attempt to capitalize on bitcoin’s price rally.

Earlier this year, CME took the prime spot on the list of the biggest bitcoin futures trading platforms, indicating a continued rise in institutional participation.

The total open interest in the bitcoin futures market is sitting at $11.3 billion, down 59% from its April 13 peak of $27.3 billion, according to Arcane Research.

Update (July 16, 13:30 UTC): Adds that Bank of America declined to comment.
Update (July 16, 14:36 UTC): Notes that these futures are cash settled.

Bank of America Banking CME Group Bitcoin Futures CME Futures

Will Canny

Will Canny is an experienced market reporter with a demonstrated history of working in the financial services industry. He's now covering the crypto beat as a finance reporter at CoinDesk. He owns more than $1,000 of SOL.

Tanzeel Akhtar

Tanzeel Akhtar has contributed to The Wall Street Journal, BBC, Bloomberg, CNBC, Forbes Africa, Financial Times, The Street, Citywire, Investing.com, Euromoney, Yahoo! Finance, Benzinga, Kitco News, African Business Magazine, Hedge Week, Campden Family Office, Modern Investor, Spear's Wealth Management Magazine, Global Investor, ETF.com, ETF Stream, CIO UK, Funds Global Asia, Portfolio Institutional, Interactive Investor, Bitcoin Magazine, CryptoNews.com, Bitcoin.com, The Local, The Next Web, Mining Journal, Money Marketing, Marketing Week and more. Tanzeel trained as a foreign correspondent at the University of Helsinki, Finland and newspaper journalist at the University of Central Lancashire, UK. She holds a BA (Honours) in English Literature from the Manchester Metropolitan University, UK and completed a semester abroad as an ERASMUS student at the National and Kapodistrian University of Athens, Greece. She is NCTJ Qualified - Media Law, Public Administration and passed the Shorthand 100WPM with distinction. She does not currently hold value in any digital currencies or projects.