Merrill Lynch Bans Clients From Trading GBTC and Bitcoin Futures

Merrill Lynch has banned clients from trading the Bitcoin Investment Trust (GBTC) and Bitcoin futures due to concerns about these Bitcoin related investments.^[1]

An explanation of the ban of the fund was contained in a memo sent to roughly 17,000 brokers at Merrill Lynch and Merrill Edge according to Reuters.^[2] The ban of futures trading had already been established.

This doesn’t appear to be a complete ban of anything Bitcoin, as it is being reported by some entities. Rather, it simply seems to be a ban on Greyscale’s Bitcoin trust and a ban on Bitcoin futures specifically.

The GBTC trust currently trades at a premium to its Native Asset Value (NAV) and has historically be volatile (just like Bitcoin). Meanwhile futures, while more stable, also expose traders to the risks of Bitcoin.

Merrill Lynch brokerage clients with historic positions in the Bitcoin Investment Trust fund can maintain them, but clients with fee-based advisory accounts have to sell their holdings, according to the memo. Futures contracts simply can’t be traded through Merrill.

1. Merrill Lynch Bars Trading of Bitcoin Fund, Futures. Wall Street Journal.
2. Merrill Lynch bans clients from investing in Silbert bitcoin fund. Reuters.