The largest American bank, which until now had a rather complicated relationship with cryptocurrencies and blockchain technology, has changed its opinion by 180 degrees. It has become the first bank in the United States to allow its customers to invest in cryptocurrencies through mutual funds. We will talk about what kind of funds these are and whether all JP Morgan clients can invest in cryptocurrencies.
A complicated relationship with blockchain technology
The largest investment bank in America, JP Morgan has not always favored cryptocurrencies. In May 2021, the CEO of this very bank, Jamie Dimon, made some questionable statements about them. He admitted that he was “not a fan of Bitcoin,” but also that, on the other hand, “customers are interested in it (Bitcoin), and he can’t tell them what to do.” There has been quite a change in Dimon’s attitude towards blockchain technology anyway, as in 2017 he simply called Bitcoin a “scam”.
Cryptocurrencies – for whom?
However, blockchain technology is gaining popularity all the time, and as a result, JP Morgan’s clients have also begun to take an interest in it. And not just any clients – the richest clients. Investing in cryptocurrencies through mutual funds is available only to private banking clients, i.e. the sector that deals with helping to manage wealth. To be considered a private banking client, you need to have a certain minimum amount in your bank account. These minimums vary from institution to institution. At JP Morgan, there are 4 thresholds, with the lowest being $50,000 and the highest being $25,000,000.
Investing in funds with cryptocurrencies
The inclusion of the option to invest in cryptocurrencies came after noticing that JPMorgan clients view cryptocurrencies, including Bitcoin (BTC), as a separate asset class. At the time, JP Morgan’s head of private banking, Mary Callahan Erdoes, confirmed that the bank would allow clients to put “their money where they want to invest it.”
Yielding to the pressure of its customers, the bank introduced the possibility of investing in mutual funds that have cryptocurrencies in their offer. There are 5 funds in total, 4 of which belong to Greyscale investment group, while one is managed by Osprey group. They allow investments in Bitcoin (BTC) and Ethereum (ETH).