JPMorgan to Launch 'Cryptocurrency Exposure Basket' of Bitcoin Proxy Stocks

The debt instrument would lean heavily on MicroStrategy, Square and Riot Blockchain stocks.

AccessTimeIconMar 9, 2021 at 8:43 p.m. UTC
Updated Sep 14, 2021 at 12:23 p.m. UTC

Just weeks after JPMorgan Chase published a report warning that traditional financial companies are at risk of falling behind in digital finance, the largest U.S. bank is looking to issue debt linked to cryptocurrency-focused companies.

J.P. Morgan Cryptocurrency Exposure Basket, the incoming debt instrument, is long on MicroStrategy (20%) Square (18%), Riot Blockchain (15%) and chipmaker NVIDIA (15%) with positions in 11 companies total. It does not invest directly in cryptos, according to the prospectus.

The basket companies "operate businesses that we believe to be, directly or indirectly, related to cryptocurrencies or other digital assets, including as a result of bitcoin holdings, cryptocurrency technology products, cryptocurrency mining products, digital payments or bitcoin trading," JPMorgan said in the prospectus.

The filing reveals yet another way Wall Street players are looking to give their clients access to the upside of a booming crypto market, which CoinGecko now estimates at $1.7 trillion.

The prospectus documents state the notes will pay out based on the basket companies’ performance less a 1.5% deduction – essentially the fee. They cost a minimum of  $1,000 minimum and have a maturation date of May 2022.

A search of JPMorgan’s history of regulatory filings indicates the mega-bank has never before issued notes related to the performance of crypto companies. Representatives for the bank did not immediately respond to CoinDesk queries.

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The stocks in JPMorgan's Cryptocurrency Exposure Basket.


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