JPMorgan Goes From ‘Bitcoin is Fraud’ to Offering Crypto Funds to Retail
JPMorgan has become the first major bank to offer cryptocurrency funds to retail clients, a recent report reveals. The news marks a watershed moment for the entire crypto ecosystem as, historically, JPMorgan and its peers have historically maintained an anti-digital asset stance.
JPMorgan’s Advisors to Execute Crypto Trades for Clients
The leading investment bank JPMorgan has granted its financial advisors the permission to execute cryptocurrency trades for its retail clients. The news follows an increasing demand for crypto trades by retail investors who see the existing volatility as an opportunity rather than an obstacle.
Starting July 19, the bank had authorized advisors to perform orders to buy and sell five cryptocurrency products, including:
- Grayscale’s Bitcoin Trust
- Bitcoin Cash Trust
- Ethereum Trust
- Ethereum Classic Products
- Osprey Funds’ Bitcoin Trust
As of now, JPMorgan’s wealth management division has more than $670 billion in client assets under supervision.
The report notes that the new policy applies to all JPMorgan clients, including self-directed clients, mass-affluent clients, and the richest tier of clients served by the bank. However, the bank has asserted that advisors will only execute “unsolicited” crypto trades, meaning they don’t recommend the products but are authorized to buy or sell on behalf of clients.
Previously, Mary Erdoes, CEO at J.P. Morgan Asset & Wealth Management, had asserted that most of the bank’s clients view cryptocurrencies as an “asset class” and express interest in investing in the space. She stated:
“A lot of our clients say, ‘That’s an asset class, and I want to invest,’ and our job is to help them put their money where they want to invest.”
JPMorgan CEO in 2017: Bitcoin is a Fraud
The news from JPMorgan represents an ironic twist given that JPMorgan CEO Jamie Dimon has remained to be a ruthless critic of the crypto industry. Back in 2017, Dimon said that Bitcoin is “worse than tulip bulbs” — the most famous asset bubble in history.
More recently, in May 2021, when JPMorgan unveiled that it will offer a Bitcoin fund for wealthy clients, Dimon stated he is still not a fan of Bitcoin. While he didn’t call Bitcoin a bubble at that particular time, he stated:
“I’m not a bitcoin supporter. I don’t care about bitcoin. I have no interest in it. On the other hand, clients are interested, and I don’t tell clients what to do.”
Nevertheless, the news is quite bullish for crypto adoption. For one, it is an indication that retail demand for gaining exposure to the volatile asset class as a store-of-value or portfolio diversifier remains strong.
Greg King, founder and CEO of Osprey Funds, whose Bitcoin Trust is one of the five cryptocurrency products JPMorgan will offer, stated:
“We are excited to be onboarded to the JPMorgan wealth platform. OBTC remains the lowest-priced publicly traded bitcoin fund in the U.S. and we believe JPMorgan’s clients will see value in the product.”
Among JPMorgan rivals, Morgan Stanley offers its wealthy clients — those with at least $2 million in invested assets — access to Bitcoin funds. Goldman Sachs offers crypto futures trading to institutional clients and hedge funds, and it may soon offer crypto to its wealthiest clients. Bank of America settles crypto exchange-traded products (ETPs) for a number of clients.
However, considering that JPMorgan now offers crypto funds to all clients, it would be fair to expect other rivals of the bank, including Goldman Sachs, Morgan Stanley, and Bank of America to also consider offering retail wealth clients direct access to crypto products.
Do you think JPMorgan’s competitors may follow suit and offer crypto products to all their clients? Let us know in the comments below.