Mar 9, 2021 - Economy

JPMorgan wants to launch crypto-related stock basket

Illustration of a pot of Bitcoins at the end of a rainbow.

Illustration: Aïda Amer/Axios

In the latest sign of Wall Street players warming to bitcoin, the largest U.S. bank wants to issue a debt instrument linked to cryptocurrency-focused companies.

Driving the news: JPMorgan’s proposed “Cryptocurrency Exposure Basket” will be heavy on MicroStrategy, Square and Riot Blockchain stocks, according to a new SEC filing.

Between the lines: The basket gives JPM clients access to the industry's upside without all the fuss of holding cryptocurrencies and digital tokens themselves.

  • Until the SEC approves a bitcoin ETF, stocks of publicly traded companies deep in the bitcoin business may be the next best thing for investors.
  • Leading the pack in the JPM basket is MicroStrategy. The Virginia-based business intelligence firm is famous for snatching up 90,859 BTC ($4.9 billion at today’s prices) since last summer as a hedge against inflation given its dollar-heavy balance sheet.
  • The company's stock will make up 20% of the proposed basket, with Jack Dorsey’s Square coming in second at 18%. The latter recently re-upped its bitcoin holdings, adding $170 million in late February to an earlier $50 million buy. Its 8,027 BTC are now worth $433 million.

The bottom line: While BNY Mellon and Goldman Sachs are getting their hands dirty with cryptocurrency assets themselves, JPMorgan is taking a more circumspect approach (and staying true to CEO Jamie Dimon's infamous dislike of bitcoin).

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