The US bank is suddenly turning bullish on Bitcoin’s long-term growth after trying to shun it for years.
Bitcoin the first time
The basket contains over 11 publicly-traded stocks with a direct or indirect focus on the crypto market, such as PayPal, MicroStrategy, Square, and Riot Blockchain. It is the first time that the US bank mentioned “bitcoin” in an official filing for a financial product that it wanted to introduce to clients.
The filing, which lists 11 reference stocks in the basket includes MicroStrategy, Square, Riot, NVIDIA, Paypal, CME Group and more https://t.co/LKXb57KgG6 https://t.co/LLN2Ud8dvN pic.twitter.com/SqHoUCoz0o
— Bloqport (@Bloqport) March 9, 2021
Per the filing, the basket would be unequally weighted (meaning the 11 stocks would be in equal proportion) and would consist of companies that either hold or trade Bitcoin directly, are involved in the asset’s mining, and create payment products related to Bitcoin or other cryptocurrencies.
Who holds what?
MicroStrategy, the business analytics firm that holds over $1.5 billion worth of Bitcoin, would account for over 20% of the basket. Payments firm Square, which holds $50 million in BTC, would hold 18%.
— Michael Saylor (@michael_saylor) March 9, 2021
Chipmakers AMD and Taiwan Semiconductor would each hold 5% of the basket, the Intercontinental Exchange group (operator of crypto exchange Bakkt) and the Chicago Mercantile Exchange (which offers BTC Futures) would hold 4%.
The bank, however, mentioned that such a basket would be subject to “extreme price volatility” due to the nature of their underlying assets and could even see a “substantial decrease” in prices over time.
As such, the basket would be available via the “JPINCEG1” ticker on the Bloomberg Terminal, an enterprise trading hardware, and would be priced later this month on March 26. It would, in addition, reach “maturity”—the time period at the end of which the basket will cease to exist and the principal is repaid with interest—on May 5, 2022.
Naysayer turned believer
He even said at the time that any JPMorgan trader found investing in Bitcoin would be fired “in a second” and doing so was against the bank’s rules and that such activities were “stupid” and “dangerous.”
But he, like the bank, turned a new leaf starting in 2019. Dimon said he regretted calling Bitcoin a “fraud” and said that blockchain technology would have a pivotal role in the future of finance. For now, however, all eyes (and stocks) are betting on crypto.
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