Financial institution of America’s prime brokerage unit has began the clearing and settlement of cryptocurrency exchange-traded merchandise (ETPs) for hedge funds in Europe, in accordance with three sources with data of the matter.
That is the second current transfer on the a part of the historically conservative financial institution within the unstable cryptocurrency area. As reported final week by CoinDesk, Financial institution of America has additionally authorized the buying and selling of bitcoin futures for some shoppers and is clearing cash-settled contracts.
Financial institution officers could have felt they might not ignore an asset class that has seen quite a few corporations dive in. The demand for merchandise equivalent to ETPs has been growing.
In February it emerged that Goldman Sachs, ICAP, JPMorgan and UBS have all been buying the 21Shares Polkadot ETP for shoppers, in accordance with Bloomberg knowledge. In June, ETC Group launched the primary bitcoin ETP within the U.Okay. on the Aquis Trade in London.
There has additionally been an growing variety of cryptocurrency ETPs being listed on the SIX change in Switzerland and the Deutsche Boerse’s Xetra market in Germany. The choices vary from blue-chips (bitcoin, ether) to the unique (cardano, polkadot.)
In keeping with CoinDesk’s sources, hedge funds are utilizing Financial institution of America’s prime brokerage unit to entry a raft of crypto ETPs authorized by European regulators. The autos permit massive corporations to put money into numerous corners of the crypto universe with out investing in crypto immediately, however by way of a safety that tracks the efficiency of varied digital belongings.
A Financial institution of America spokesperson declined to remark.