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Merrill Lynch Bans Bitcoin Investments and the SEC Warns Cryptocurrency Investors

A small portion of yellow caution tape.

In a relatively quiet day in the cryptocurrency markets, Merrill Lynch, Bank of America 's (NYSE: BAC) brokerage arm, has blocked its clients from buying bitcoin and related investments, such as futures. The SEC has also issued yet another warning to investors in cryptocurrencies and ICOs.

Here's a rundown of today's moves in cryptocurrency prices, and the details of the latest news.

Today's cryptocurrency prices

Here's a look at the eight largest cryptocurrencies by market capitalization, and how much each has changed over the past 24 hours.

Cryptocurrency Name (Code) Price in U.S. Dollars Day's Change
Bitcoin (BTC) $15,068 2%
Ripple (XRP) $2.76 (1.4%)
Ethereum (ETH) $947.19 3%
Bitcoin Cash (BCH) $2,409.20 (5.5%)
Cardano (ADA) $1.15 8.8%
NEM (XEM) $1.65 9.4%
Stellar (XLM) $0.69 (24.5%)
Litecoin (LTC) $236.12 (3.8%)

Data Source: Prices and daily changes as of 3:10 p.m. EST on Jan. 4, 2018, and prices are rounded to the nearest cent where appropriate.

It's been a relatively quiet day for the largest cryptocurrencies. Bitcoin, Ripple, and Ethereum have all barely moved, and bitcoin cash's 5.5% move isn't out of the ordinary.

However, there has been some interesting activity further down the chart. Cardano, which has surged this week, continued its move upward. Stellar, which catapulted past Litecoin on Wednesday, dropped by about 25% in a volatile trading day. And NEM leapfrogged over Stellar and Litecoin to move into the number six position.

NEM jumps to sixth place

Through a combination of a 9% pop, and drops in both Stellar and Litecoin, NEM (which stands for New Economy Movement) jumped into sixth place on the list of the largest cryptocurrencies.

Like Cardano, Stellar, and several other cryptocurrencies, NEM was designed to address some of the challenges facing bitcoin's blockchain technology, specifically in terms of scale and speed. Also like some of the other recently-surging coins, NEM is focusing on enterprise clients, aiming to facilitate peer-to-peer payments and money transfers.

Merrill Lynch bans bitcoin-related investments

Merrill Lynch has banned its clients and advisors from buying (or recommending) bitcoin or related investments. This includes the newly created bitcoin futures, as well as the Bitcoin Investment Trust (NASDAQOTH: GBTC) . Existing positions in brokerage accounts can be kept, but not in fee-based advisory accounts.

In a nutshell, Merrill Lynch is concerned about these types of investments given the recent bubble-like environment. According to an internal memo reviewed by The Wall Street Journal , "The decision to close GBTC to new purchases is driven by concerns pertaining to suitability and eligibility standards of this product."

A small portion of yellow caution tape.

Image source: Getty Images.

The SEC warns cryptocurrency investors (again)

The SEC warned investors to "exercise caution" with cryptocurrencies, saying in its warning that regulators may not be able to recoup money lost due to illegal activity. In other words, if you invest in a cryptocurrency or Initial Coin Offering (ICO) that ends up being a scam, or is illegally manipulated, you may have little or no recourse.

This comes on the heels of an extensive warning to investors by SEC Chairman Jay Clayton that provided guidance for investors on how to approach investing in ICOs.

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Matthew Frankel owns shares of Bank of America. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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