In Industry First, JPMorgan Opens up Bitcoin Access to Retail Clients
By Landon Manning
A first in the world of top-level financial institutions, JPMorgan (JPM) has opened up retail access to Bitcoin (BTC), and not just for its largest institutional clients, but for any and all of the customers who use their platforms.
This news came from JPMorgan itself on July 19, with the claim that this new service “applies to all JPMorgan clients seeking investment advice, including the bank's self-directed clients using its commission-free Chase trading app,” with inclusion available for all JPMorgan customers.
This new move is a continuation of a Bitcoin-friendly policy that the bank has been pursuing for at least several months now, albeit this is the first time that JPMorgan has consciously put itself at the head of the pack on that front. Back in mid-March, 2021, the bank displayed support for the cryptocurrency, stating publicly that it was looking into what sorts of products for sale would be most solid in terms of existing regulation. Despite previous skepticism towards Bitcoin, it recognized the overwhelming success that the asset was enjoying, and began offering ways to give indirect exposure to Bitcoin for a wide audience, in the hopes that this indirect exposure would serve as a “gateway drug.”
Under these new guidelines, JPMorgan financial advisors will not be able to initially recommend the purchase of Bitcoin to their clients in any fashion, but those clients who wish to specifically request exposure to the world’s number one cryptocurrency will have those requests fulfilled. JPMorgan is currently only offering exposure through the purchase of various traditional financial products that have their value directly or indirectly tied to the value of Bitcoin. It is important to note that after a client breaks the seal on purchases of this asset class, this frees up the advisor’s hands somewhat. After the initial exposure is established, asset managers will have the prerogative to invest in several other Bitcoin-related financial assets, such as those offered by Grayscale or Osprey Fund’s Bitcoin Trust.
Although these are still relatively tepid steps in the world of true Bitcoin adoption, there are several factors to consider beyond just the regulatory hurdles and uncertainty associated with offering Bitcoin as a form of investment.
In 2017, for example, CEO Jamie Dimon said that “Bitcoin is worse than tulip bulbs,” and that he wished to fire any employees who traded in it. Dimon is still JPMorgan’s CEO today, and he recently admitted that “clients are interested, and I don't tell clients what to do.”
In April, plans surfaced of a Bitcoin fund offered by JPMorgan to only the highest-level clients. However, not only has this fund not materialized, but the Bitcoin exposure that has been implemented since then has been open to the widest array of JPMorgan clients and customers. With the valuation of Bitcoin currently holding firm at a level head-and-shoulders above most pre-pandemic imagining, this shift from ultra-wealthy clients to a more accessible approach represents a promising change for the financial sector’s attitude toward BTC. With JPMorgan leading the pack in terms of Bitcoin acceptance, the financial future of the space is looking brighter indeed.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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