Merrill Lynch last week became the latest — and largest — Wall Street bank to say no to bitcoin, New York Post columnist Jonathon Trugman wrote.
The brokerage arm of Bank of America said its 17,000 financial advisers can’t sell the cryptocurrency to its clients, even though everyone wants some. After a 2,000-percent-plus gain in 2017, bitcoin is “the hottest thing to hit Wall Street since Amazon stock took off,” Trugman said.
“Will bitcoin become the future of digital currency? Maybe. Are digital transactions and encrypted currencies the future? Most definitely. But let’s wait for them to become less volatile before we invite everyone to the party,” he added.
Here’s some additional perspective from NewsMax Finance. Story by F. McGuire.
Bitcoin is a virtual asset that can be used to move money around the world quickly and with relative anonymity, without the need for a central authority, such as a bank or government.
Bitcoin is one of the wildest trades in the market today, delivering sharp gains and losses that defy explanation. Trading has been expensive and difficult, with brokerages offering limited access and specialist websites like Coinbase reporting regular outages. Top voices on markets from economist Robert Shiller to JPMorgan Chase & Co CEO Jamie Dimon have warned people off buying bitcoin.
As of Dec. 8, the (Merrill Lynch) Wall Street brokerage stopped approving new orders for the Bitcoin Investment Trust due to concerns about the “suitability and eligibility standards of this product,” according to the memo sent to roughly 17,000 brokers at Merrill Lynch and Merrill Edge, a unit for clients who manage their own trades, Reuters reported.
Wall Street has taken a cautious approach to digital currencies, which are unregulated and have very volatile trading patterns.
Last month, Chicago-based derivatives exchanges Cboe Global Markets and the CME Group launched bitcoin futures, but some banks and brokerages remain reluctant to trade them, Reuters reported.
“Though bitcoin is likely to evolve into a less volatile asset, the craze today reminds me of the 1990s’ know-it-all yuppie tech stock fad. Remember, people were in search of and often buying startup tech stocks that offered little more than a hope, a prayer and a crazy story about how they were going to take over the world,” he wrote. “So many of those tech darlings turned out to be dogs — and took those investors down with them.”
Bitcoin was recently trading at about $14,970.
Meanwhile, U.S. fund managers are ramping up efforts to tap into the fever surrounding digital assets, and the latest planned bitcoin products could deliver some head-turning and stomach-churning price movements if they come to market.
The new idea is to build “leveraged” and “inverse” funds that would rise – or fall – twice as fast as the price of bitcoin on a given day, Reuters reported.
Direxion Asset Management LLC plans to list such products on Intercontinental Exchange Inc’s NYSE Arca exchange if U.S. securities regulators give the nod, according to a filing by the exchange this week.
In the filing, the exchange said the listing “will enhance competition among market participants, to the benefit of investors and the marketplace.”
Newsmax Finance Insider Ed Moy predicts that the volatile digital currency isn’t going anywhere.
“Bitcoin is here to stay,” says Moy, who served as the 38th Director of the United States Mint from 2006-2011.
“When supply is limited and demand increases, the price usually goes up. But when speculators drive the prices up, there usually is a major correction,” Moy wrote in a recent Newsmax Finance blog.
“And after the correction, the true value of bitcoin will be obvious.”
Read more at NewsMax Finance.
Black Americans Have the Highest Mortality Rates But Lowest Levels of Life Insurance
Are you prioritizing your cable entertainment bill over protecting and investing in your family?
Smart Policies are as low as $30 a month, No Medical Exam Required
Click Here to Get Smart on Protecting Your Family and Loves Ones, No Matter What Happens