In a sign of the increasing allure of cryptocurrencies, Bank of America’s Merrill Lynch and Wells Fargo have rolled out spot bitcoin exchange-traded funds (ETFs) to eligible wealth management clients. This move underscores the growing popularity of digital assets in traditional financial institutions.
Sources familiar with Bank of America’s plans revealed that the ETFs have been accessible to clients for several weeks. The introduction of spot bitcoin ETFs by these major banks follows the Securities and Exchange Commission’s (SEC) groundbreaking approval of such investment vehicles in January.
Wells Fargo confirmed the availability of spot bitcoin ETFs in a statement, saying, “Spot bitcoin ETFs are available for unsolicited purchases through an advisor with Wells Fargo Advisors or through our online WellsTrade platform.”
Spot bitcoin ETFs provide investors with exposure to the world’s largest cryptocurrency without requiring direct ownership. Following a lengthy battle with the SEC, 11 such ETFs commenced trading in the United States last month, opening up the cryptocurrency market to new investors. The introduction of these funds has reignited excitement in the cryptocurrency space, which waned during the “crypto winter” of 2022 when prices experienced a significant downturn.
The surge in popularity of spot bitcoin ETFs has led some investors to shift their holdings from gold-backed ETFs, with Bitcoin often being referred to as “digital gold.” Bernstein analyst Gautam Chhugani expressed confidence in Bitcoin’s future, stating, “We remain convinced that bitcoin is on an 18-month path to $150,000 led by unprecedented institutional adoption.” Bitcoin recently reached $60,000 for the first time in over two years.
While Bank of America and Wells Fargo embrace the trend, Vanguard, the largest mutual fund provider, has opted not to offer spot bitcoin ETFs on its platform for brokerage clients. This divergence highlights the varied approaches financial institutions are taking toward the evolving landscape of digital assets.
