FINTECH FRIDAYS

23th July 2021

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A milestone for Investment and Institutional Banking

This week of Fintech Fridays, we will be diving into global investment bank J.P.Morgan’s decision to grant its advisors to allow investors to plunge into the world of cryptocurrency and what it means for the future of investing. Once thought of as an asset class that has no productive use besides the act of transferring funds, through the emergence of various altcoins that deliver blockchain solutions, the public are easing their hostile impression.

 

Once sharing his defensive outlook in 2017, Jamie Dimon called Bitcoin a fraud and also said he'd "fire in a second" any JP Morgan trader who was trading Bitcoin, noting two reasons: "It's against our rules and they are stupid." Taking a sharp turn last Friday, where the 3 trillion bank has authorised and created 5 different cryptocurrency funds that would be actively managed by its traders. This marks the first time an investment bank of this magnitude allowed client demand to change its rules.

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CEO Jamie Dimon: I'm not a bitcoin supporter. I don't care about bitcoin. I have no interest in it

Partnering with Greyscale and Osprey Investments that supply the products for the funds, we are able to analyse anatomize the reason why digital currency investments have become so popular. With a proven track record and unrivalled experience, Grayscale and Osprey provide access to digital currency products that operate within existing regulatory frameworks, creating secure and compliant exposure for investors, without actually investing in the currencies itself.

 

Currently, the largest cryptocurrency investment fund with around 40 billion under management, Greyscale are providing 4 out of the 5 products. These include Grayscale’s Bitcoin Trust (return of 233.37% within 12 months), Ethereum Trust (return of 647.65% within 12 months), Bitcoin Cash Trust  (return of 81.25% within 12 months), and Ethereum Classic Trust  (return of 584.06% within 12 months).

 

The expansion of J.P.Morgan’s service due to increased demand has allowed retail investors to recognise that even a prestigious firm such as J.P.Morgan has recognised they need these users to use their platform. Following this news, a bullish run has occurred from $29,711 USD (21 July) to $32,083 USD (32 July), roughly a 9% return.

References:

https://news.bitcoin.com/jpmorgan-begins-offering-5-cryptocurrency-funds/

https://www.coindesk.com/podcasts/the-breakdown-with-nlw/jpmorgan-bitcoin-institutional-wealth

The views expressed within this article are those of the authors and do not represent the views of the Finance Student's Association. All images and references in this article are for fair and educational purposes only. The content in this article is not intended as legal, financial or investment advice and should not be construed or relied on as such.