JPMorgan allows clients to invest in Bitcoin funds for the first time, and the new service could be launched as early as this summer, with NYDIG serving as the fund’s custody provider, as reported in today’s Bitcoin news.
JPMorgan Chase is planning to offer a managed BTC Fund to select clients, making it the latest and largest bank to embrace crypto or BTC as an asset class, despite its CEO’s documented disapproval of the crypto. The JPMorgan Bitcoin fund could launch this summer, with the institutional Bitcoin firm NYDIG serving as the custodian.
The JPMorgan BTC fund will be actively managed, which is a significant departure from the passive offerings of crypto industry companies such as Galaxy Digital and Pantera Capital, which allow clients to buy and hold BTC through funds without ever touching it. Galaxy and NYDIG have also begun to offer BTC funds to Morgan Stanley clients.
The JPMorgan fund will be for clients with private wealth. In 2017, CEO Jamie Dimon called Bitcoin a dangerous fraud and threatened to fire any trader who touched it:
“If you’re stupid enough to buy it, you’ll pay the price for it one day.”
Dimon also claimed that government regulation of cryptocurrency is unavoidable and stated that bitcoin is not his cup of tea. Despite its CEO’s personal disdain for cryptocurrency, top executives in the Corporate and Investment Banking division admitted in February that client demand could force the institution to change. Even though the client-facing BTC fund is new, the colossal investment, commercial banking, and wealth management divisions were evolving in their treatment of crypto and blockchain. In their client reports, bank research analysts provided market insight on the Bitcoin price and prospects.
The company’s ONYX division now wants to use blockchain technology and JPM Coin, for example, to speed up interbank payments. After five years of quiet development, Onyx is launching a massive global hiring campaign for blockchain engineers. Nikolaos Panigirtzoglou, a market strategist, was unable to comment on the news that the bank will begin offering BTC services, but he did analyze the demand for these types of funds. JPMorgan released its first crypto product, a structured note tied to the performance of BTC proxy stocks such as Riot Blockchain and Microstrategy, in March.