Investment Strategies

JP Morgan Shows More Digital Assets Love

Tom Burroughes, Group Editor, March 11, 2021

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That major institutions such as JP Morgan, BNY Mellon, Guggenheim Partners and others are involved in the space has been a reason why some commentators think digital assets are going mainstream.

JP Morgan intends to give its clients exposure to digital assets such as bitcoin by investing in firms that are involved into the crypto-sector, media reports said, citing official regulatory filings. The story adds to suggestions that bitcoin is going mainstream.

The bank, in a filing with the Securities and Exchange Commission, said that it is going to offer an investment basket with 11 companies. The entity is called the JP Morgan Cryptocurrency Exposure Basket, according to Coindesk and other outlets. It does not invest directly in cryptos, according to the prospectus.

JP Morgan will offer investment notes with a $1,000 minimum investment, which will pay out based on basket companies’ market performances. There will be a deduction of 1.5 per cent in the management fee.

The US bank’s decision to launch such a fund will raise a wry smile among financial industry figures who remember JP Morgan chief executive Jamie Dimon, often an outspoken figure, saying in 2017 that bitcoin was a “fraud”. However, he later rowed back from his remarks and said he regretted his comment.

That major institutions such as JP Morgan, BNY Mellon, Guggenheim Partners and others are involved in the space has been a reason why some commentators think digital assets are going mainstream. This news service recently interviewed Nickel Digital Asset Management, a firm in the space, about how bitcoin can, for example, add returns without increasing overall portfolio volatility - see here.

Tesla, the electric car firm led by maverick entrepreneur and space flight tycoon Elon Musk, is among the most high-profile players in bitcoin. The firm said in early February that it had bought $1.5 billion of bitcoin. 

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