JP Morgan yesterday filed a crypto exposure basket with the US Securities and Exchange Commission
JP Morgan is preparing to introduce a debt security with crypto-related stocks, according to filings filed with the Securities and Exchange Commission (SEC) by the multinational investment bank. The shopping cart product contains a total of 11 unequally weighted reference stocks that are directly or indirectly linked to digital assets according to the bank’s fact sheet.
Most of the stocks named in the basket come from large institutional investors in Bitcoin. These include MicroStrategy with the highest allocation, PayPal, Square, Intercontinental Exchange, CME Group, Silvergate Capital and the internet retailer Overstock. Tesla is a notable absentee from the shopping cart, despite recently investing $ 1.5 billion in Bitcoin.
“Reference stock weights were determined based in part on exposure to bitcoin, correlation with bitcoin, and liquidity.” JP Morgan wrote.
Wall Street Investment Bank offers investor clients the opportunity to get involved in the turbulent digital asset market via the Note. JP Morgan has specifically stated that the basket does not offer investors direct exposure to digital assets and that the performance of the basket may not necessarily match the price of individual crypto assets.
“The banknotes offer no direct risk to cryptocurrencies, and the performance of the shopping cart may not be correlated to the price of a particular cryptocurrency such as Bitcoin.”
It’s worth noting that the cart product submission comes just a month after JP Morgan’s Co-President and COO Daniel Pinto announced that the bank will start using crypto once customer demand is satisfactory. Previously, the bank had also provided its private banking clients with a report on Bitcoin as a portfolio diversifier, when appropriately allocated. The move to launch the product may indicate a growing demand for crypto exposure among Wall Street investors.
The special features of the shopping cart product are in the “Insight Notes in connection with the J.P. Morgan Basket of Companies with exposure to cryptocurrency.Other companies in the shopping cart are GPU designer NVIDIA, Riot Blockchain (each 15% of the shopping cart) and semiconductor manufacturer AMD.
The shopping cart has the price and original issue dates of March 26 and March 31, respectively. The document also revealed the observation date on May 2 next year, followed by a due date three days later. Investors can invest a minimum of USD 1,000 in the shopping cart product.