JPMorgan launches crypto exposure basket

Golden Eggs Basket

When you’re in, you’re in. A long time ago, JPMorgan used to be skeptical of cryptocurrencies, but now the US bank firmly believes that these digital assets are a reality.

And not just that, it is also heavily invested in the space, with the most open blockchain jobs among other financial giants, and recommending others to invest in it, too. And with BlackRock and Goldman Sachs also joining the party, this signals a growing interest in crypto on Wall Street.

JPMorgan, though, is already a step ahead.

JPMorgan Logo

It has just launched a new product that can be called a crypto exposure basket, designed to give buyers exposure to big players in the Bitcoin space like MicroStrategy and Square. Also in this basket are companies like Riot Blockchain, NVIDIA, and PayPal.

MicroStrategy, for example, has 90,000 bitcoins on its balance sheet, worth upwards of $4.9 billion. Square owns more than 8,000. Riot focuses on crypto mining, while NVIDIA is also in the game thanks to its technology that is commonly used in this activity.

The shares of these companies often move as the price of Bitcoin rises or falls. JPMorgan will create debt products linked to the performance of the crypto basket, thereby giving investors indirect exposure to the cryptocurrency market.

The bank detailed this new product in a SEC filing on Tuesday.

MicroStrategy makes up 20% of the crypto exposure basket, Square 18%, Riot 15%, and NVIDIA 15%. Other companies that are also linked to Bitcoin exchanging or mining are also in the basket, and these include PayPal, AMD, and CME Group.

Investors gain access to notes, which are essentially fixed-income products that do not pay interest. These come in denominations of $1,000, and payments will become due in May 2022. A fee of 1.5% will be deducted from any gains.

The bank does stress that the notes do not provide direct exposure to cryptocurrencies. That is to say that the performance of the basket may not be correlated with the price of any particular cryptocurrency like Bitcoin.


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