Bank of America is allowing some clients to trade bitcoin futures, report says

BofA logo
Bank of America is reportedly addressing demand for bitcoin access by clients.

  • Bank of America has approved access to bitcoin futures to some clients, CoinDesk reported Friday.
  • The bank gave the green light due to the large amount of margin required to trade the futures, the report said.
  • Bitcoin is trading at less than half its all time high of near $65,000 achieved earlier this year.
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Bank of America is allowing some of its clients to trade bitcoin futures, according to a CoinDesk report, a move that highlights the growing push by institutions into the cryptocurrency market.

The second-largest bank by assets in the US has been conservative in dealing with cryptos but it has approved giving some clients access to the market due to the large amount of margin required to trade the futures, CoinDesk reported Friday, citing an unnamed source. Another source told the site some of BofA’s clients are setting up to trade bitcoin futures and that one or two may have already started trading.

To address institutional interest in digital currencies, Bank of America recently launched a cryptocurrency research team, according to a memo obtained by Insider.

“Cryptocurrencies and digital assets constitute one of the fastest growing emerging technology ecosystems,” said Candace Browning, head of global research, in a July 8 memo addressed to Merrill Lynch Wealth Management employees and partners.

Goldman Sachs has expanded its presence in the bitcoin market by offering non-deliverable forwards, a derivative tied to bitcoin’s price that pays out in cash, Bloomberg reported in May.

The news of BofA’s bitcoin move comes as the market value of the global cryptocurrencies has dropped to $1.3 trillion from a high of more than $2.4 trillion in May, led largely by a selloff in bitcoin. Bitcoin traded below $32,000 on Friday and was headed toward its worst weekly performance in more than a month.

The crypto market has been struggling in part on the back of regulatory headwinds from China and the US. This week, Federal Reserve Chairman Jerome Powell said the US won’t need stablecoins and cryptocurrencies if the central bank were to issue its own digital currency.

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The father of El Salvador’s Bitcoin Beach received an anonymous donation of a cryptocurrency fortune – now the local economy runs on it

bitcoin payment el salvador people buying
Jose Cabezas/Reuters

  • Michael Peterson became the so-called Father of Bitcoin Beach, Bloomberg Businessweek reported.
  • Thanks to an anonymous donation, Peterson helped El Zonte widely adopt the currency.
  • Lawmakers in El Salvador have since voted to adopt the cryptocurrency as legal tender.
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47-year-old Michael Peterson fell in love with El Zonte, a Pacific-coast beach in El Salvador, 17 years ago when he visited for a surfing trip.

The town grew on him, and he and his family started splitting their time between their home in California and El Salvador, where they supported missionary groups and small development projects through their Evangelical Christian church.

That church put him into an unlikely scenario that transformed El Zonte into Bitcoin Beach, and made Peterson its father figure.

A June 16 Bloomberg Businessweek article, titled “Bitcoin Beach: What Happened When an El Salvador Surf Town Went Full Crypto,” documented how Peterson helped convert El Zonte’s payments to cryptocurrency. Now, nearly all of the town’s households and four dozen local businesses use Bitcoin.

“It’s crazy how fast Bitcoin has caught on,” Peterson told Bloomberg reporter Ezra Fieser. Peterson did not immediately respond to Insider’s request for comment for the story.

The concept came about in 2019 when an anonymous Californian offered to donate his Bitcoin fortune to El Zonte to create a local economy run on the cryptocurrency. Peterson was introduced to the donor, who remains unknown, through church.

At first, Peterson thought it sounded like a scam, Bloomberg said, but then the thought of transforming El Zonte made him rethink.

“It allows everybody from the poorest to the richest to participate on the same playing field,” he told Bloomberg.

Adopting ‘magic internet money’

Already having a long-standing relationship with the community helped Peterson get locals to adopt the idea, he said in a CoinDesk podcast on June 11.

“When I told them, ‘Hey, we’re gonna start using this magic internet money, and we’re gonna [get] stores to accept it, we’re gonna get people to start taking their salaries in it,’ they just kind of looked at me like, ‘OK, Mike,'” he said on the podcast.

The experiment really took off when El Salvador’s tourism industry struggled amid the COVID-19 pandemic. Peterson gave hundreds of local families about $35 in Bitcoin each month through an app created for small crypto transactions. El Zonte stores wanted in on the currency, so Peterson launched the Bitcoin Beach Wallet in September.

Now, Bitcoin has become the norm.

Thanks in part to the El Zonte experiment, El Salvador became the first country in the world to adopt Bitcoin as a currency. It then asked the World Bank for help implementing the cryptocurrency as a legal tender, but was swiftly rejected.

Because of the “crazy amount of interest” since the currency was legally adopted, Peterson is planning on helping other towns across the country mimic the El Zonte experiment.

“For a lot of these people, this is the first time they felt hope that they can build a future in El Salvador, that they’re not going to have to follow the path of their parents to sneak into the US illegally and work in some dead-end job. They can build a business based on bitcoin,” Peterson said on the CoinDesk podcast. “It really opens up the world to them.”

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Why ether’s 349% rally this year is less hype-driven than previous bull cycles, according to one crypto researcher

Vitalik Buterin
Founder of Ethereum Vitalik Buterin during TechCrunch Disrupt London 2015

  • Ether hit a new all-time high above $3,100 on Monday.
  • Coindesk’s Noelle Acheson said the rally appears to be less-frothy and driven by more fundamental reasons.
  • Anticipation of a network upgrade and a better understanding of Ethereum’s role in decentralized finance is propelling the latest rally, she said.
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Ether’s current rally is less hype-driven and based more on fundamentals than in previous cycles as investors begin to understand Ethereum’s role in decentralized finance, according to Coindesk’s managing director of research Noelle Acheson.

The cryptocurrency built on top of the open source Ethereum blockchain hit a new all-time high above $3,100 Monday morning in its ninth straight day of gains.

That takes its year-to-date gains to more than 300%, far exceeding bitcoin’s 95% rise in 2021.

While Acheson said part of the price movement upward is likely driven by investors eyeing the round number of $3,000 and jumping in, it’s nothing like the momentum trading Ether saw from retail investors in 2017 during its last bull cycle.

“This time around there seem to be more professional investors involved…and the retail market is better informed about crypto more broadly,” Acheson told Insider.

When Ether reached $1,000 in 2017, just two years after the coin began trading publicly, it was very “inflated” given the fact that Ethereum network didn’t have that many applications built on top of it, she said.

“Now, Ethereum is powering decentralized finance, it’s powering stablecoins, it’s powering part of the NFT universe,” Acheson added, saying that the potential of the Ethereum network is better understood than four years ago.

Decentralized finance refers to a class of new applications that aim to replace traditional financial products – like lending and borrowing, trading, saving, derivatives, and options – through the use of decentralized tech, rather than relying on a company or bank. Ethereum was made for these “DeFi” applications to be built on top of the Ethereum blockchain.

Ether’s price is also going higher as investors prepare for the Ethereum network to undergo a massive upgrade to “Ethereum 2.0” that will improve the network and make it more scalable, Acheson said.

Though she emphasized that this upgrade and further institutional adoption doesn’t guarantee that the price of Ether will continue to go up.

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