JPMorgan Launching ‘Cryptocurrency Exposure Basket’ for Crypto Firms

Jafrin  |  Mar 10, 2021

Wall Street investment bank, JPMorgan is looking to launch 'Cryptocurrency Exposure Basket' which revolves around issuing notes to cryptocurrency-focused companies. According to a new regulatory filing with the U.S. Securities and Exchange Commission (SEC). Investor clients of the largest bank in the U.S will now get a way to gain exposure to cryptocurrencies in the form of public-company stocks involved with digital assets.

The Launching of 'Cryptocurrency Exposure Basket'

JPMorgan's 'Cryptocurrency Exposure Basket’ includes well-known companies in the crypto space consisting of 11 U.S.-listed companies

In its prospectus document, the bank revealed that the 'basket companies' will include those that operate businesses related directly or indirectly, related to cryptocurrencies, including BTC holdings, crypto products, crypto mining products, crypto payments, or bitcoin trading.

The Bitcoin-tied publicly-listed companies include market intelligence firm MicroStrategy, Jack Dorsey’s payments company Square, mainstream payment giant PayPal, crypto security firm Curv.

Other companies include Riot Blockchain, NVIDIA, AMD, Taiwan Semiconductor Company TSMC, Intercontinental Exchange, CME Group, Overstock, and Silvergate Capital.

The crypto exposure basket will allocate 20% to MicroStrategy, 18% to Square. It also provides direct exposure of 15% to Riot Blockchain. Meanwhile, Nvidia Corporation and PayPal Holdings each account for 15% of the basket with positions in 11 companies in total.

The notes will be paid out based on how the basket of companies performs with less than a 1.5% deduction inclusive of the fee. The minimum investment is $1,000 with a maturation date of May 2022.

JPMorgan Never Issued Notes Related to Crypto Companies

The weights of the reference stocks were determined based in part on exposure to Bitcoin, correlation to Bitcoin, and liquidity.

The notes will carry a pricing date of March 26. The original date of issuance will be on or about March 31, 2021, with observation and maturity dates on May 2, 2022, and May 5, 2020, respectively.

JPMorgan emphasized that the exposure provided is not directly tied to any particular cryptocurrency, including bitcoin. Meanwhile, the performance of the notes will not be determined by the performance in the digital asset market itself.

Previous regulatory filings indicate that JPMorgan has never before issued notes related to the performance of crypto companies.

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