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Intro: Bank of America is all set to give go ahead to its clients to deal in bitcoin futures. As per the sources some of the clients have already begun bitcoin futures trading.
The U.S. second-largest bank, Bank of America, has given a green signal for bitcoin futures to be traded on the platform for some clients. Unlike other institutions, the bank has been conservative in its approach to the crypto sector.
Clients can deal easily
As per the sources, for trading futures, there is a large amount of margin required. Hence, the bank has allowed some clients to access the crypto market. Where some clients are gearing up to trade cash-settled bitcoin futures, other clients have already gone live with trading.
A new pattern has been observed in the market. A number of investment banks have given permission to their clients to deal in crypto products. Goldman Sachs, in March confirmed relaunching the trading desk. The trading was stopped by the bank for a period of three years.
Meanwhile, through Chicago Mercantile Exchange (CME), buying and selling of Bitcoin futures in block trades was started in May. The trading partner was Cumberland DRW.
CME futures on roll
The investment bank from America, BOA will be using CME futures as per the sources. When contacted by the bank, they refused to comment.
The N.C. based bank, Charlotte earlier this month has formed a team to work and research cryptocurrencies and related technologies. Bank of America had stopped all bitcoin-related investments but the policy has changed now. The trading was done in 2018 last time.
The D-day
In 2017, CME futures were incepted. CME also launched its micro bitcoin futures in May. These products were launched in an attempt to capitalize on bitcoin’s price rally.
On the bitcoin futures trading platforms, CME took the premier spot on the list. There was a continuous rise observed in the participation of institutional investors.
In the Bitcoin futures market, the interest is at $11.3 billion, decreased to 59% from its peak of April 13 when it was sitting at $27.3 billion.
As per the report by Arcane Research, the downward trading pattern was indicated due to the cautious actions of institutional investors. The report also noted that three-month futures in bitcoin are in a downward trend. It means the trading was happening at a discounted price as compared to the current spot prices.
Andrew is a blockchain developer who developed his interest in cryptocurrencies while pursuing his post-graduation major in blockchain development. He is a keen observer of details and shares his passion for writing, along with coding. His backend knowledge about blockchain helps him give a unique perspective to his writing skills, and a reliable craft at explaining the concepts such as blockchain programming, languages and token minting. He also frequently shares technical details and performance indicators of ICOs and IDOs.
