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Bank of America Is Clearing Crypto ETPs for Hedge Funds in Europe: Sources
The bank’s prime brokerage unit is said to be allowing clients to access various crypto exchange-traded products.
Bank of America’s prime brokerage unit has started the clearing and settlement of cryptocurrency exchange-traded products (ETPs) for hedge funds in Europe, according to three sources with knowledge of the matter.
This is the second recent move on the part of the traditionally conservative bank in the volatile cryptocurrency arena. As reported last week by CoinDesk, Bank of America has also approved the trading of bitcoin futures for some clients and is clearing cash-settled contracts.
STORY CONTINUES BELOW
Bank officials may have felt they could not ignore an asset class that has seen numerous companies dive in. The demand for products such as ETPs has been increasing.
In February it emerged that Goldman Sachs, ICAP, JPMorgan and UBS have all been purchasing the 21Shares Polkadot ETP for clients, according to Bloomberg data. In June, ETC Group launched the first bitcoin ETP in the U.K. on the Aquis Exchange in London.
Read more: Bank of America Approves Bitcoin Futures Trading for Some Clients: Sources
There has also been an increasing number of cryptocurrency ETPs being listed on the SIX exchange in Switzerland and the Deutsche Boerse's Xetra market in Germany. The offerings range from blue-chips (bitcoin, ether) to the exotic (cardano, polkadot.)
According to CoinDesk’s sources, hedge funds are using Bank of America’s prime brokerage unit to access a raft of crypto ETPs approved by European regulators. The vehicles allow big firms to invest in various corners of the crypto universe without investing in crypto directly, but through a security that tracks the performance of various digital assets.
A Bank of America spokesperson declined to comment.
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.
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.
