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JPMorgan Launches In-House Bitcoin Fund for Private Bank Clients

The mega-bank has started pitching Private Bank clients on a passive bitcoin fund in partnership with NYDIG.

Aug 5, 2021 at 2:06 a.m. UTC
Updated Sep 14, 2021 at 1:35 p.m. UTC

JPMorgan Chase began pitching an in-house bitcoin fund to its Private Bank clients for the first time this week, completing its transformation from the "never-bitcoin" mega-bank to a participant in the digital assets market.

The passively managed fund doesn’t have any investments from clients yet, according to two people familiar with the matter. That could soon change because advisers were primed about the fund only yesterday in a call with the bank. JPMorgan declined to comment. The fund is being offered in partnership with NYDIG, which is the bitcoin arm of asset-management firm Stone Ridge.

The fund, which CoinDesk revealed in late April, will be presented to clients as the safest and cheapest bitcoin investment vehicle available on private markets, the sources said. 

JPMorgan CEO Jamie Dimon, a bitcoin skeptic, once said he would fire any JPMorgan employee who traded bitcoin, according to the Australian Financial Review. But more recently he has said that clients want to invest in them and therefore JPMorgan has a responsibility to deliver crypto investments safely.

“I am not a bitcoin supporter, I don’t really care about bitcoin,” Dimon told the Wall Street Journal in May. “On the other hand, clients are interested and I don’t tell clients what to do.”

The private fund would also act as a port to a bitcoin exchange-traded fund if the U.S. Securities and Exchange Commission ever approves a crypto ETF, a source said. 

JPMorgan doesn't have a bitcoin ETF bid before the SEC, but almost a dozen other firms do, including Grayscale, which is widely expected to eventually convert its high-fee Grayscale Bitcoin Trust product to an ETF. Grayscale is owned by the Digital Currency Group, the parent company of CoinDesk.

NYDIG has also filed for a bitcoin ETF application, which the SEC is reviewing.

All of JPMorgan's wealth management clients recently gained the ability to access bitcoin funds such as GBTC through JPMorgan brokerage account, according to Business Insider. The new bitcoin fund, however, is limited to JPMorgan Private Bank customers.

DISCLOSURE

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

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