Demand for cryptocurrencies is increasing among Wall Street investors, so JPMorgan wants to launch a basket of stocks that will allow it to meet the growing needs of its clients.
In a Valid identity document presented to the United States Securities and Exchange Commission (SEC), the financial services giant in the country, JPMorgan, is asking the regulator to approve a new and innovative investment strategy, which will allow it to expose its clients and investors to the potential of cryptocurrencies, and digital assets. Although this is an indirect exposure, JPMorgan is making sure to bring its clients into the crypto industry, and benefit from the appreciation that this growing and developing industry promises.
Call for applications “JP Morgan Cryptocurrency Exposure Basket”, JPMorgan's new financial and investment vehicle provides investors interested in gaining exposure to the performance offered by cryptocurrencies with information notes in the form of shares of public companies involved with these digital assets. Among the companies that are linked to cryptocurrencies are: Square, a payment service provider that integrates cryptocurrencies; Riot Blockchain, a company dedicated to bitcoin mining; Paypal, the electronic payments provider that offers cryptocurrency trading and custody operations from its platform; Nvidia, manufacturer of GPUs and other devices used to mine cryptocurrencies; CME Group, the world's largest derivatives exchange, offering derivative products for cryptocurrencies such as Bitcoin and Ethereum, and microstrategy, the largest institutional investor in Bitcoin (BTC) Until now.
As the document explains, the reference stocks included in the investment basket represent the common stocks or depositary shares of a total of 11 US companies listed on the stock exchange in the country, and which are related in some way to cryptocurrencies and digital assets. On the other hand, the entity clarifies that these stocks do not provide direct exposure to cryptocurrencies, and that the performance of the basket of stocks may not be correlated, at any time, with the price or behavior of any particular cryptocurrency within the markets, such as Bitcoin.
If the new investment strategy is approved, JPMorgan will be able to issue notes that will track the capital of the aforementioned US companies. The minimum denomination for each note will be $1.000 USD.
It may interest you: JPMorgan: Institutional investors see Bitcoin as a better alternative to gold
Entering the crypto market in a “prudent” way
JPMorgan analysts recently published a report warning accredited and institutional investors about the risks of not adapting to the digital and technological revolution that accompanies new finance; and also, they recognized that cryptoassets can be a good way to diversify portfolios if they are sized correctly.
In a interview on CNBC in mid-February, Daniel Pinto, co-president of JPMorgan, said that one of the bank's requirements for adopting Bitcoin and cryptocurrencies is a high demand from its clients and potential investors. Pinto said that “The demand is not there yet, but I am sure it will be at some point”Well, it seems that the time has come, because the entity is offering this new investment instrument to its clients.
JPMorgan has also warned about the potential volatility risks faced by investors entering the crypto industry.
Changing perceptions about cryptocurrencies
Pinto's statements, analysts' recommendations to invest in Bitcoin, and the intention to launch a basket of stocks linked to cryptocurrencies, demonstrate that JPMorgan is, little by little, changing the perception it has about Bitcoin and the cryptocurrency industry in general.
Jamie Dimon, chairman of JPMorgan, has been in business for years expressing that Bitcoin is a fraud, and that he feels a deep rejection towards this cryptocurrency. However, now it seems that he has no other choice but to get involved, even if prudently, with the crypto space.
Other investment entities, and renowned in this sector, such as BNY Mellon, Goldman Sachs, Stone ridge y Citi are publicly declaring their support for this new form of money, and have even begun to actively participate within the digital industry. BNY Mellon is preparing to hold Bitcoins, and is creating a multi-asset platform; Stone Ridge is openly investing in Bitcoin; Citi believes that BTC will become the preferred currency for international trade; and Goldman Sachs, among many things, is preparing to launch its own digital currency.
At the time of this edition, Bitcoin maintains a value of $55.600 USD and a market capitalization of 1,03 trillions of dollars. On the other hand, the total capitalization of cryptocurrencies is 1,72 billones of dollars.
Continue reading: Say goodbye to old technologies, BNY Mellon adopts blockchain to create the first multi-asset platform
