As another weekend tumbles by, Bitcoin continues to remind investors that cryptocurrencies can be a volatile asset class.
Some have posited that, amidst the dramatic price swings, Bitcoin assets could benefit from active management. JPMorgan could soon test that thesis.
“JPMorgan Chase is preparing to offer an actively managed bitcoin (BTC, +13.28%) fund to certain clients, becoming the latest, largest and – if its CEO’s well-documented distaste for bitcoin is any indication – unlikeliest U.S. mega-bank to embrace crypto as an asset class,” reports Danny Nelson for CoinDesk. “The JPMorgan bitcoin fund could roll out as soon as this summer, two sources familiar with the matter told CoinDesk. Institutional bitcoin shop NYDIG will serve as JPMorgan’s custody provider, a third source said.”
The Right Timing for JPMorgan Chase?
JPMorgan’s plans for an active Bitcoin strategy come as the Securities and Exchange Commission (SEC) is nearing review of a pair of Bitcoin exchange traded fund applications. Should those funds be approved, the products would likely be available to a broad swath of investors, including the retail segment.
“JPMorgan’s bitcoin fund will be actively managed, multiple sources told CoinDesk. That’s a notable break from the passive fare offered by crypto industry stalwarts like Pantera Capital and Galaxy Digital, which let well-heeled clients buy and hold bitcoin through funds without ever touching it themselves. Galaxy and NYDIG are now offering bitcoin funds to Morgan Stanley clients,” according to CoinDesk.
More institutional investors are stepping into the Bitcoin, which is widely seen as a catalyst for higher prices for the digital asset.
Although JPMorgan Chase CEO Jamie Dimon previously knocked Bitcoin, some analysts at the bank are bullish on the digital asset and are actively engaged in research on the asset. One example recently highlighted by the bank is the importance of Bitcoin futures in the market.
“JPMorgan’s hulking investment, commercial banking and wealth management divisions have gradually evolved in their treatment of crypto and blockchain, even if the client-facing bitcoin fund is new. The bank’s research analysts regularly issue market insight on bitcoin’s price and prospects in reports available to clients,” concludes CoinDesk.
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