Wall Street Banks Revolt Against Bitcoin Futures Contracts Launch
As investors rush into bitcoin, some big Wall Street banks are hitting the brakes.
Bank of America (BAC) Merrill Lynch and Citigroup Inc. (C) are telling customers that they won't offer them access to the first bitcoin futures market when it goes live on Sunday, people familiar with the matter said .
Futures are financial contracts giving the buyer an obligation to purchase an asset (and the seller an obligation to sell an asset) at a set price at a future point in time.
Banks play a key role in facilitating futures trades for hedge funds and other big trading firms. If they don't provide access to the new market, some of their customers might be unable to place bets on bitcoin futures.
The rapid increase has made it difficult for more buttoned-up Wall Street firms to ignore the digital currency, despite concerns over its uncertain legal status and links with illicit activity. Now, banks are trying to catch up with surging investor interest, while at the same time managing the risks associated with bitcoin's notorious volatility.
The hesitation of big brokerage firms also casts doubt on whether Wall Street is ready for cryptocurrencies.
