Just a few weeks after JPMorgan Chase outlined a report warning that traditional financial firms are in danger of falling behind in digital finance, the leading United States bank is looking to issue debt associated with crypto-focused firms.
J.P. Morgan Cryptocurrency Exposure Basket, the incoming debt instruments, is long on MicroStrategy [20%], Square [18%], Riot Blockchain [15%] as well as chipmaker NVIDIA [15%] with positions in 11 firms total. It doesn’t invest directly in crypto assets, consistent with the prospectus.
The basket firms “operate businesses that we believe to be, directly or indirectly, associated with crypto assets or other virtual assets, including as a result of bitcoin [BTC, -1.05%] holdings, cryptocurrency technology products, crypto mining products, digital payments or bitcoin trading,” JPMorgan added within the prospectus.
The filing reveals yet one more way Wall Street players are investigating to offer their clients access to the upside of a booming cryptocurrency market, that CoinGecko now estimates at $1.7 trillion.
The prospectus documents state the notes can payout supported the basket firms’ performance less a 1.5% deduction – essentially the fee. They cost a min of $1k min and have a maturation date of May 2022.
A search of JPMorgan’s history of regulatory filings outlined the mega-bank has never before issued notes associated with the performance of cryptocurrency firms. However, at the reporting time, the representatives for the bank didn’t immediately answer.