Investment Bank JPMorgan To Launch A Basket of ‘Bitcoin Stocks’
Wall Street Investment bank JPMorgan is planning to launch a new ‘Bitcoin stocks’ trading product that will give investors exposure to Bitcoin through a structured note offering tied to a basket of stocks related to BTC.
According to the Securities and Exchange Commission (SEC) filing, the new product is a debt instrument called JPMorgan’s Cryptocurrency Exposure Basket.
The Bitcoin Basket
The ‘Basket’ contains an ‘unequally weighted’ amount of US-listed companies that either hold Bitcoin, or businesses that work in the Bitcoin industry.
The Basket will allocate 20% to MicroStrategy (MSTR), 18% to Square Inc. (SQ), and Bitcoin miner Riot Blockchain (RIOT) will also have a 15% allocation in the basket, as will mining chip manufacturer NVIDIA (NVDA).
Payments giant PayPal will make up 10% of the Basket, and the rest will be made up of Advanced Micro Devices, Taiwan Semiconductor Manufacturing Company Limited, CME Group, Overstock.com, Silvergate Capital Corporation and Bitcoin futures exchange Bakkt parent company Intercontinental Exchange.
Investment Banks Getting Into The Bitcoin Space Whichever Way They Legally Can
According to the filing, there is a 1.5% charge for the Basket, and the notes will be priced from 31 March and go live on 6 April 2021. They will cost a minimum of $1,000 and investors will be charged the fee at maturation of the notes, no later than May 2022.
JPMorgan warns that the price may see ‘extreme volatility’ but ‘may not be correlated with the price of any particular cryptocurrency, such as Bitcoin.’
However, the bank does make it clear that the companies chosen as bigger parts of the Basket were chosen ‘based in part on exposure to Bitcoin, correlation to Bitcoin and liquidity.’
It’s also the only legal way JPMorgan can legally offer Bitcoin products, at this moment. With Bitcoin unregulated the investment bank would find it either impossible or at best extremely time consuming to be able to offer direct exposure to Bitcoin.
JPMorgan Steadily Completing Its About Turn
JPMorgan’s latest offering is part of a trend from America’s biggest banks, which has seen them all change their Bitcoin narrative.
Last month, Bitcoin Maximalist reported on how JPMorgan had held a Town Hall meeting for thousands of its traders and sales personnel, with Bitcoin taking up much of the time.
The investment bank’s COO Daniel Pinto admitted they would have no choice but to get involved with Bitcoin and digital assets ‘if it becomes a broadly-used asset class’ and we can see they are circumventing the regulatory hurdle by offering a ‘Bitcoin Stocks Basket’.
It’s part of a trend, that has gone from JPMorgan’s CEO Jamie Dimon calling Bitcoin a fraud to now banks racing to start offering exposure to Bitcoin.