JPMorgan will allow all clients seeking advice to access these funds through its advisors, rather than ordinary high net worth individuals.
JPMorgan is said to have become the first major U.S. bank to allow its financial advisers to give wealth management clients access to cryptocurrency funds.
The bank told its advisers in a note earlier this week that as of July 19, they can buy and sell five crypto funds on behalf of a client, Business Insider reported.
The offerings include Bitcoin Trust (OBTC) from Osprey Funds, as well as four from Grayscale Investments: its Bitcoin Trust, Bitcoin Cash Trust, Ethereum Trust and Grayscale Ethereum Classic Trust.
The move comes after Morgan Stanley confirmed in April that it is offering its clients bitcoin exposure through two external crypto funds. CNBC said the bank allows such access to individual investors with at least $ 2 million or investment firms with $ 5 million or more.
But JPMorgan’s new policy applies to all clients who seek advice, according to Business Insider, including stand-alone users of its Chase trading app, clients whose assets are managed by JPMorgan advisers, and the very high net worth individuals. served by the private bank. While they can buy or sell these funds for clients who request them, advisors cannot recommend the products.
JPMorgan declined to comment further on the decision.
John Key, managing director of Valkyrie Investments who previously spent 24 years at UBS, said that while he was not surprised by the news, it was an “ironic twist” given previous comments from the JPMorgan Chase CEO Jamie Dimon on bitcoin.
Dimon told an investor conference in New York in 2017 that the cryptocurrency “will not end well,” calling it a fraud and adding that he would fire an employee for trading bitcoin.
Key noted that every platform Valkyrie has spoken to is currently evaluating the policy on how it can make it easier for its clients to invest in bitcoin or other cryptocurrencies. This includes all major banks, he explained, as well as regional AIRs and independent platforms.
“I think this is very important and I think it just underscores the momentum and interest there is in this asset class,” Key told Blockworks of JPMorgan’s move. . “When an industry giant, the leader, takes a step forward like this, it definitely puts pressure on everyone. I’m sure most people are pretty advanced… but I think maybe that could serve to speed up part of this decision-making process.
Key added that we can expect to see similar announcements soon from industry stalwarts like UBS and Merrill.
“I think at some point they’ll all have to have some sort of policy,” he said of customer access to crypto. “Some will be broader and more liberal on this subject. Some will be more restrictive given the specific bank and customers and their type of business.
The move comes after JPMorgan reportedly prepared to offer an actively managed bitcoin fund to its private clients, according to a report from CoinDesk.
The national cash register recently partnered with digital asset management firm NYDIG to enable 650 US-based banks and credit unions to offer crypto trading services and bitcoin purchases to around 24 million. customers through mobile applications.
Industry watchers told Blockworks that banks need to innovate to be competitive, and those that have yet to announce ways to enter the crypto space are likely working on behind-the-scenes plans.
Bank of America was preparing to allow certain clients to trade bitcoin futures contracts, CoinDesk reported last week.
Pure Digital, an interbank marketplace for cryptocurrency price discovery and wholesale risk trading, announced Wednesday that BNY Mellon will join State Street and other banks to help it develop a platform digital asset transaction. BNY Mellon, which has $ 45 trillion in assets in custody, formed a digital assets unit in February.