JP Morgan is launching a structured investment product based on the performance of its â€œCryptocurrency Exposure Basket,â€ which tracks stocks of publicly traded companies with exposure to cryptocurrencies. The weight of each stock is â€œdetermined based in part on exposure to bitcoin, correlation to bitcoin and liquidity,â€ according to the companyâ€™s filing with the U.S. Securities and Exchange Commission (SEC).
JP Morgan to Begin Providing Clients With Bitcoin Exposure
In a Tuesday filing with the SEC, JPMorgan Chase revealed a structured investment product that enables its clients to gain exposure to cryptocurrencies.
â€œThe notes are unsecured and unsubordinated obligations of JPMorgan Chase Financial Company LLC,â€ the company explained. The payment on which is â€œfully and unconditionally guaranteed by JPMorgan Chase & Co.â€
The investment bank added: â€œNotwithstanding the name of the basket, the notes do not provide direct exposure to cryptocurrencies and the performance of the basket may not be correlated with the price of any particular cryptocurrency, such as bitcoin.â€
The reference stocks represent the common stocks of â€œ11 U.S.-listed companies that 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,â€ JP Morgan detailed.
They include Microstrategyâ€™s Class A common stock, Squareâ€™s Class A common stock, Riot Blockchainâ€™s common stock, Nvidiaâ€™s common stock, Paypal Holdingsâ€™ common stock, and Advanced Micro Devicesâ€™ common stock.
The minimum denomination for the new investment product is $1,000. The notes are expected to price on or about March 31 and are expected to settle on or about April 6.
â€œThe weights of the reference stocks were determined based in part on exposure to bitcoin, correlation to bitcoin and liquidity,â€ JPMorgan further clarified. â€œThe basket may be subject to extreme price volatility and rapid and substantial decreases in price over the term of the notes.â€
The investment bank has come a long way since its CEO Jamie Dimon called bitcoin a fraud back in September 2017. The firm recently came up with three key benefits for investing in BTC after its analysts predicted that the price of the cryptocurrency could reach $146,000 as its competition with gold heats up. The firm then recommended that investors could put 1% of their portfolios in cryptocurrency.
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