A CoinDesk report revealed that Bank of America had reportedly started offering crypto trading to some select customers. The report stated that Bank of America’s prime brokerage unit had begun the clearing and settlement of crypto exchange-traded products (ETPs).
The ETPs are currently being provided to hedge funds in Europe, said CoinDesk. According to three sources who were knowledgeable on the matter.
Related Reading | Market Remains In “Extreme Fear” As Bitcoin Price Plummets
Demand for ETPs has been on the rise as digital assets have seen increasing popularity. And megabanks have had to find ways to give their clients exposure to digital assets. Doing this without exposing themselves directly to the digital assets which are infamous for being incredibly volatile. Banks have reported that they are seeing increasing demands from their clients to have options for them to trade crypto digital assets.
Banks Getting Into Cryptocurrencies
The past months have seen big banks coming up with ways to expose their clients to crypto assets. Banks are currently barred by regulation from buying crypto assets directly. In light of this, the banks have made partnerships with crypto firms to bring things like bitcoin futures trading to clients.
Clients have had to turn to brokerage firms like Robinhood and Coinbase for access to cryptocurrencies. Centralized exchanges like Binance have also seen increasing patronage as more people get into digital assets.
Total crypto market cap less than 50% all-time high | Source: Crypto Total Market Cap on TradingView.com
Bank of America now seems to have joined the increasing line of big banks offering this service to their clients. Banks like Goldman Sachs have recently changed their stance on digital assets.
The megabank had announced earlier in the year it was offering bitcoin futures trading to clients. Then in June, the bank had also come forward to say it was going to start offering Ether options and futures to clients. Goldman Sachs revealed it was doing this through a partnership with Galaxy Digital.
A report from Bitcoinist also revealed that a new partnership would see clients be able to purchase bitcoin across 650 U.S. banks.
What This Means For Cryptos
Institutions getting into digital currencies do not always mean the institutions themselves are interested. Most likely, it’s due to their clients demanding ways to trade cryptos or taking their money elsewhere.
Related Reading | PayPal Increases Weekly Crypto Purchase Limit To $100K, Does Away With Yearly Limit
But regardless of the reasons, big-name banks being attached to cryptos is always a welcome development. People seeing institutions they know and trust coming into the market shows them the market might not be as scary as they thought.
The news has not really had any effect on market prices. The overall market continues to suffer dips. While also trying to post corrections.
Featured image from USA Today, chart from TradingView.com