• With JPMorgan’s new product, buyers can encounter big Bitcoin players like MicroStrategy and Square.
  • This is a sign of growing interest in cryptocurrencies on Wall Street, and BlackRock and Goldman are moving in too.
  • JPMorgan’s product will also allow exposure to Riot Blockchain, Nvidia and PayPal.
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JPMorgan is launching a product that allows investors to invest in cryptocurrencies. This is the latest sign that Bitcoin’s meteoric rise is generating widespread interest in Wall Street.

An SEC filed by the bank on Tuesday showed it is creating a “basket of companies at cryptocurrency risk” dominated by MicroStrategy, Square, Riot Blockchain and Nvidia.

MicroStrategy has over 90,000 bitcoins on its balance sheet, valued at over $ 4.9 billion on Wednesday’s Bitcoin price, while Square owns more than 8,000 bitcoins. Riot focuses on crypto mining while Nvidia’s technology is widely used in this activity.

The companies’ stocks often move as the price of bitcoin rises or falls. JPMorgan will create debt security products that are linked to the performance of the crypto basket and allow investors to indirectly get exposure to the cryptocurrency market.

However, JPMorgan’s filing emphasized that “the banknotes do not pose a direct risk to cryptocurrencies and the performance of the shopping cart may not correlate with the price of a particular cryptocurrency such as Bitcoin”.

MicroStrategy accounts for 20% of the crypto exposure basket, Square 18%, Riot 15% and Nvidia 15%. PayPal, Advanced Micro Devices and CME Group, all of which are associated with the exchange or mining of Bitcoin, are also in the shopping cart.

The notes – essentially fixed income products that do not pay interest – will be delivered in denominations of $ 1,000 and payments will be due in May 2022. There is a 1.5% deduction from all winnings, which equates to a fee.

So if the companies in the basket were up 20%, investors would get 18.5% on an investment of $ 1,000, which equates to $ 1,185.

JPMorgan’s creation of a crypto basket is further evidence of Bitcoin’s growing pull on Wall Street, which rose more than 80% in 2021.

Goldman Sachs is restarting its crypto trading desk and found in an internal survey of almost 300 customers that 40% were exposed to cryptocurrencies.

BlackRock, the world’s largest wealth manager, said two of its funds could invest in bitcoin futures, while BNY Mellon has announced its intention to manage cryptocurrencies.

Screenshot 2021 03 10 on 12/11/21


JPMorgan SEC filing