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JPMorgan Provides Access to Crypto Funds to its Wealth Clients



JPMorgan Provides Access to Crypto Funds to its Wealth Clients

Key takeaways:

  • The banking giant started offering crypto fund investments on July 19 to all clients who have their funds managed by JPMorgan advisors and to those who use the Chase trading app.
  • Out of five investment options, four are Grayscale products and one from Osprey Funds.
  • The bank’s advisors are forbidden from actively promoting the crypto offering, they can only execute their clients’ requests.

Institutional involvement in the cryptocurrency industry has been one of the main storylines this year. Now, JPMorgan has instructed its financial advisors via an internal memo to start collecting trade orders from their wealth clients interested in investing in crypto funds.

Grayscale’s Bitcoin and Ethereum trusts are a part of the JPMorgan offering

As reported by Bussiness Insider on Thursday, the bank will start accepting cryptocurrency trade orders from its retail clients. Customers can decide between investing in five approved funds, which include Grayscale’s Bitcoin, Bitcoin Cash, Ethereum and Ethereum Trusts as well as Osprey Bitcoin Trust. 

JPMorgan thus became the first big US bank to start giving access to investments in crypto funds to all its retail clients. The move is not surprising, as earlier internal reports showed considerable interest in cryptocurrency from the bank’s clients, especially in Bitcoin and Ethereum.

Additionally, an ever-increasing share of bank’s clients perceives digital currencies as a new asset class as confirmed by JPMorgan’s director of asset and wealth management, Mary Callahan Erdoes in a recent interview.

The bank is adapting to the rapidly changing investment landscape

The recent development shows how far the cryptocurrency industry has come over the past few years. In 2017, for example, JPMorgan’s CEO Jamie Dimon said Bitcoin is a fraud and added: “It’s worse than tulip bulbs. It won’t end well. Someone is going to get killed.”

He reiterated his position earlier this year by saying he is not a Bitcoin supporter and that he has no interest in it. Despite CEO’s anti-crypto stance, the bank can’t deny the interest from the clients is growing. In line with this trend, the financial giant is reportedly also working on the launch of an actively managed Bitcoin fund.

JPMorgan financial advisors can only execute trades requested by clients but can’t actively recommend crypto offerings

At the moment, advisors are forbidden from recommending crypto products themselves, they can only follow their client’s instructions. The latest offering won’t be reserved just for its ultra-rich clients but for all clientele who have their assets under the management of JPMorgan.

Competitors from the traditional banking sector are sure to quickly follow suit. The investment banking giant, Morgan Stanley, is already actively pursuing adding crypto offerings to its growing number of financial products.

It has already filed the necessary paperwork with the US Securities and Exchange Commission (SEC). Morgan Stanley was the first big US bank to offer access to Bitcoin funds, but the offering had several severe limitations, such as only being available to wealthy clients, and limited to up to 2.5% of a client’s total net worth.

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