Bank of America Reportedly Approves Bitcoin Futures Trading
America's second-largest bank has reportedly started allowing clients to trade Bitcoin futures.
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According to two anonymous sources, the Bank of America, the second-largest bank in the U.S, has started approving Bitcoin futures trading for some clients.
The Bank of America Launches Bitcoin Futures
Competition is increasing in Bitcoin futures trading.
The Bank of America has started allowing some clients to trade bitcoin futures, two anonymous sources familiar with the matter told reporters at Coindesk.
Futures trading has become an important part of institutional involvement with cryptocurrencies. Due to regulatory issues, large institutional investors may not want to hold Bitcoin directly. Instead, Bitcoin futures allow institutions to gain exposure to Bitcoin and other cryptocurrencies without holding the underlying assets.
Interest in Bitcoin futures has been increasing. In the last two months, the volume of Bitcoin futures trading on the Chicago Mercantile Exchange (CME) has jumped from $910,000 to over $23 million.
The CME's BTC Options product is on track to smash its record-breaking volume of May 2020. pic.twitter.com/kizpPWpjw9
— skew (@skewdotcom) June 16, 2020
The Bank of America will follow the likes of Goldman Sachs, which started providing Bitcoin futures trading through the CME back in May. According to one of the anonymous sources, the Bank of America will also use the CME for futures trading.
America is not the only country to see an explosion in Bitcoin futures trading. The Singapore-based exchange Bybit has also seen record trading volumes on Bitcoin futures, surpassing $4.2 billion in May.
Despite the market downturn, Bitcoin futures still look to be in high demand. If institutional interest remains high, expect more banks to start offering their clients Bitcoin futures soon.
Disclaimer: At the time of writing this feature, the author held BTC and ETH.