JPMorgan creates Cryptocurrency exposure basket for clients! JPMorgan created Cryptocurrency Exposure Basket for clients to bet on companies working in the crypto space.
The basket contains over 11 publicly traded stocks with a direct or indirect focus on the crypto space. Companies include Square, PayPal, MicroStrategy, and Riot Blockchain.
Per the filing, the basket would be unequally weighted, meaning that the 11 stocks would be in equal proportion. These companies would either hold or trade Bitcoin directly, are involved in the asset’s mining, and create payment products related to Bitcoin or other cryptocurrencies.
MicroStrategy, the business analytics firm that holds over $1.5 billion worth of Bitcoin. This company would account for over 20%. Payments firm Square, which holds $50 million in BTC, would 18%.
Riot Blockchain and chipmaker NVIDIA would each hold 15% of the basket, with PayPal holding 10%. Chipmakers AMD and Taiwan SemiConductor would each hold 5% of the basket – Intercontinental Exchange group (operator of Bakkt) and the CME would hold 4%. Overstock (which accepts Bitcoin as payment) and crypto bank Silvergate finish out the list with 2% holdings each.
The bank has cautioned that the basket would be subject to “extreme price volatility” due to the nature of their underlying assets. They also noted that the basket could see a “substantial decrease” in prices over time.
The basket will be available via the Bloomberg Terminal under the ticket JPINCEG1. It would reach maturity on May 5th, 2022.
JPMorgan, along with its CEO Jamie Dimon have long been naysayers of cryptocurrencies. Dimon famously referred to Bitcoin as a “fraud… worse than tulip bulbs”.
He even stated that if any JPMorgan trader was investing in Bitcoin, they’d be fired “in a second” and was against bank rules. He labeled such activities as “stupid” and “dangerous”.
He changed his tune in 2019, saying that he regretted calling Bitcoin a “fraud” and that blockchain technology would have a pivotal role in the future of finance. Right now, everyone seems to be betting on Crypto – even naysayers like JPMorgan.
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