JP Morgan has become the first major U.S. bank to give all its wealthy clients access to crypto funds including Grayscale Bitcoin Trust (GBTC).
On Thursday, July 22, Business Insider reported that JPMorgan told its financial advisors in a memo last week to take buy and sell orders for five cryptocurrency products, four from Grayscale Investments and one from Osprey Funds, effective July 19.
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Approved funds and service
The service allows all JP Morgan clients including self-directed clients using its commission-free Chase trading app, affluent clients managed by financial advisors under JPMorgan Advisors, and ultrarich clients serviced by the private bank.
The bank’s advisors can facilitate only “unsolicited” crypto trades, meaning they cannot recommend any products but are allowed to buy or sell on the behalf of a client’s request.
The funds JPMorgan has approved are Grayscale’s Bitcoin Trust, Bitcoin Cash Trust, Ethereum Trust, and Ethereum Classic, and Osprey Funds’ Bitcoin Trust, the person told Business Insider.
Growing demand creating a new market segment
Greg King, founder and CEO of Osprey Funds told Forbes that,
“We are excited to be onboarded to the JPMorgan wealth platform. OBTC remains the lowest-priced publicly traded bitcoin fund in the U.S. and we believe JPMorgan’s clients will see value in the product.”
In April JP Morgan told CoinDesk that it was preparing to offer an actively managed bitcoin fund.
Mary Callahan Erdoes, the asset and wealth-management chief at JP Morgan, told Bloomberg that many clients view crypto as an asset to invest in.
Change of heart
This move marks a U-turn from their previous stance when the CEO Jamie Dimon said bitcoin is worse than the tulip bulbs bubble and threatened to fire any employee who dealt in crypto. During that period many JP Morgan subsidiaries were actually buying the dip as had been reported by Bitcoin.com. This was followed by an announcement when the bank purportedly began offering bitcoin trading services.
Since then, there was no looking back as JP Morgan embraced crypto with open arms. They even launched their own digital coin called the JPM Coin.
What are the competitors doing ?
Erdoes said that the bank would allow clients to “put their money where they want to invest,” including crypto.
The bank’s competitors such as Goldman Sachs, Morgan Stanley, and Bank of America still have not given retail clients access to crypto. Morgan Stanley was the first to give high net worth individuals, with at least $2 million invested, access to bitcoin funds, through a partnership with Galaxy Digital in April, CNBC reported.
This move has shown banks’ growing trust in private digital currencies. They are putting their apprehensions aside and embracing it wholeheartedly. Banks are now beginning to explore the potential of cryptocurrencies and the other benefits offered by the blockchain networks.
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