JPMorgan is seeking permission to launch a basket of stocks with exposure to cryptocurrencies, in a move that would avoid the brunt of volatile bitcoin prices.
The Wall Street investment bank has filed a proposal for a “cryptocurrency exposure basket” which would track 11 publicly-traded stocks involved in bitcoin and other digital assets, documents filed with the US Securities and Exchange Commission showed.
The basket would include companies such as MicroStrategy and Square, which have recently announced significant investments in bitcoin as part of their portfolio strategies.
Though some companies would be included in the basket due to bitcoin holdings, JPMorgan said others could be “cryptocurrency technology products, cryptocurrency mining products, digital payments or bitcoin trading”.
Other constituents include Riot Blockchain, chipmakers NVIDIA, TSMC and AMD, PayPal, CME Group, Overstock.com, Intercontinental Exchange and Silvergate Capital.
JPMorgan said in the filing that while the basket’s companies were chosen in part based on “exposure to bitcoin, correlation to bitcoin and liquidity… The basket does not, however, offer direct exposure to cryptocurrencies or other digital assets”.
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While JPMorgan’s analysts have been outspoken about the advantages of bitcoin as a form of “digital gold”, the bank has been more cautious about trading the assets themselves.
The lender’s move amid rival Goldman Sachs re-opening its crypto trading desk this month, while BNY Mellon similarly ploughs into the sector.
JPMorgan said MicroStrategy would be its largest constituent, making up around 20% of the basket. The company bought almost $5bn worth of bitcoin since it began investing in the crypto asset last year.
Square would come in second at 18% of the basket, having recently increased its bitcoin investment to around 8,000 BTC ($438m, as of 11am GMT).
A survey conducted by Nickel Digital Asset Management, published on 10 March, showed 85% of institutional investors and wealth managers already investing in bitcoin plan to increase their exposure to the cryptocurrency in the next two years.
Data from CoinShares on 9 March showed bitcoin continues to take the lion’s share of attention from digital asset investors, raking in 90% of all digital asset inflows last week.
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To contact the author of this story with feedback or news, email Emily Nicolle
