Just weeks after JPMorgan Chase declared a report warning that traditional financial firms are at risk of falling behind in digital finance, the largest U.S. bank is looking to issue debt linked to cryptocurrency-focused organizations.
According to JPMorgan, the basket companies operate businesses that they 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.
The filing shows another way Wall Street players are looking to give their clients access to the upside of a booming crypto market, which CoinGecko now values at $1.7 trillion.
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.
The basket would include big companies, including MicroStrategy and Square
The Wall Street investment bank has filed a proposal for a cryptocurrency exposure basket, which would track 11 publicly-traded stocks involved in BTC and other cryptocurrencies, documents filed with the U.S. Securities and Exchange Commission confirmed. According to the prospectus, it does not invest directly in cryptos.
Another essential thing to note is that the basket would include big companies, including MicroStrategy and Square, which have recently published notable investments in the dominant cryptocurrency as part of their portfolio strategies.
Though some firms would be included in the basket due to bitcoin holdings, JPMorgan announced others could be cryptocurrency technology products, cryptocurrency mining products, digital payments, or BTC trading.
Other constituents include Riot Blockchain, chipmakers NVIDIA, TSMC and AMD, PayPal, CME Group, Overstock.com, Intercontinental Exchange, and Silvergate Capital.
JPMorgan stated in the filing that while the basket’s companies were chosen in part based on exposure to bitcoin, correlation to bitcoin, and liquidity. However, the basket does not offer direct exposure to cryptocurrencies or other digital assets.