JP Morgan appears to be the latest institution to embrace the reality that digital assets may be the future. The multinational investment bank is launching a “Cryptocurrency Exposure Basket,” which will track the stocks of publicly-traded companies with exposure to digital assets.
The incoming debt instrument leans heavily on MicroStrategy (20%), Square (18%), and Riot Blockchain (15%). In general, the basket covers 11 unequally weighted reference stocks. JPMorgan in its Tuesday filing with the SEC said:
[The basket represents the stocks of 11 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.
JPMorgan further stated that the notes will payout based on the performance of basket companies after a 1.5% deduction. The debt instrument costs a minimum of $1,000 and has a maturation date of May 2022.
The prospectus documents state the notes will payout based on the basket companies’ performance less a 1.5% deduction – essentially the fee. They cost a minimum of $1,000 minimum and have a maturation date of May 2022.
Undoubtedly, JPMorgan has come a long way from its days of bashing Bitcoin. In September 2017, CEO Jamie Dimon dubbed Bitcoin a fraud. Amid the growing adoption from institutional investors, the firm has tilted mostly in favor of Bitcoin. Recently, the bank advised clients to expose 1% of their portfolios to Bitcoin.