JPMorgan Chase’s constant love-hate relationship with cryptocurrency has been a fascinating one to observe over the years, especially since the digital asset sector started exploding at the start of 2021. To put things into perspective, between February and April, the total market capitalization of the space doubled from $1 trillion to $2 trillion.
As a result of this meteoric ascent, the individual market cap of premier cryptocurrencies such as Ether (ETH) and Bitcoin (BTC) has gone on to become higher than those of established multinationals, with Bitcoin surpassing Tesla, Tencent, Visa, Berkshire Hathaway, Alibaba, Facebook and Samsung, among others.
Back in 2017, JPMorgan CEO Jamie Dimon referred to BTC as a “fraud,” even going as far as saying that he would fire employees if they dealt with Bitcoin. However, fast-forward four years, and Dimon has dialed back on his “fraud” label.
Not only that, but more recently, he seems to have relaxed his anti-crypto stance, claiming that crypto is here to stay and that it is now only a matter of time before governments across the globe start to regulate their local digital asset markets with an iron fist. Yet he maintained during an event that took place in late 2020 that Bitcoin was still not his “cup of tea.”
The times they are a-changin’
Despite Dimon’s somewhat negative outlook toward Bitcoin and the crypto industry, recent reports suggest that JPMorgan is currently preparing to offer some of its clients an actively managed Bitcoin fund, potentially becoming one of the largest — and most unlikely — banking institutions to embrace crypto.
In fact, there are speculations that the fund could be rolled at as soon as this summer, with insiders claiming that fintech firm NYDIG will provide its custody services to the banking behemoth.
Additionally, it has also been reported that JPMorgan’s Bitcoin fund will be “actively managed,” which comes in stark contrast to the passive fare currently offered by many crypto players such as Pantera Capital and Galaxy Digital.
Cointelegraph reached out to Sam Tabar — chief strategy officer of Bit Digital, a Nasdaq-listed Bitcoin mining firm, and former head of capital strategy for the Asia-Pacific region at Bank of America Merrill Lynch — who stated:
“JPMorgan’s launching of its own Bitcoin fund is just an inevitable response to rising consumer demand for blockchain. JPMorgan is a business and will pursue whatever money-making endeavors it can. Despite controversial statements from CEO Jamie Dimon, the company has been working towards incorporating blockchain technology within its business model for years.”
In this regard, it bears mentioning that the company’s “Onyx” division launched a stablecoin, JPM Coin, in late 2020. Not only that, but the contrast between Dimon’s past remarks and JPMorgan’s current direction, in Tabar’s opinion, is an exemplary illustration of the process of institutionalization. He believes that there will always be pushback from traditional frameworks and leaders, making JPMorgan’s change of heart a clear win for blockchain innovation.
He added: “Much of Dimon’s statements stemmed from a failure to grasp certain use cases for cryptocurrencies, such as tokenization and smart contracts.” However, it is also true that information on BTC was more scarce at the time, according to Tabar.
What does JPMorgan’s potential entry mean for the market?
There is no denying that the popularity of the crypto market has risen in recent months, with investors now having access to the industry via a variety of traditional financial instruments, including exchange-traded funds, exchange-traded products and even stocks in the form of companies like Coinbase. In the wake of all this, most legacy banking institutions have continued to shy away from the space even though it presents a tremendous amount of monetary and technological potential.
Felix Simon — head of business development at Dsent AG, a…
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