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- As per the filing with the SEC, the investors will get exposure to 11 Bitcoin proxy stocks.
- JP Morgan has endorsed one per cent of allocation towards cryptocurrency
JP Morgan Providing Crypto Exposure to Clients
JP Morgan has launched the Cryptocurrency Exposure Basket with almost 68% of stocks from 11 different companies. The investment bank is giving exposure to its clients to different cryptocurrencies to have maximum benefit and exposure from the trade.
While filing with the U.S. Securities and Exchange Commission, JP Morgan & Chase Co. has revealed that the company is launching a structured investment product that helps its clients to get exposure to cryptocurrencies. The Cryptocurrency Exposure Basket will track the different companies’ stocks with exposure to cryptocurrencies.
As per the filing with the SEC, the investors will get exposure to 11 Bitcoin proxy stocks. The Cryptocurrency Exposure Basket has an unequally weighted basket of reference stocks that either has cryptocurrency or operate business linked to it.
Investors who want to get exposure to the JP Morgan Cryptocurrency Exposure Market will not directly expose the cryptocurrencies and the basket’s performance. They may not be related to the price of any particular cryptocurrency like Bitcoin.
The allocation of cryptocurrency exposure basket
Square Inc will get an 18% share and 20% to MicroStrategy Incorporated. These are the two companies that declared their Bitcoin investments early on. 15% allocation was also given to Riot Blockchain, a cryptocurrency mining company and NVIDIA Corporation, a cryptocurrency mining Corporation. Hence, they make up about 68% of the basket.
The reference stocks show the common stocks of 11 U.S. listed companies. These companies operate businesses directly or indirectly related to cryptocurrencies or digital assets. The companies whose stocks are included in the basket are
- MicroStrategy Class A common stock,
- Square’s Class A common stock,
- Riot Blockchain’s common stock,
- Nvidia’s common stock,
- PayPal Holdings’ common stock, and
- Advance Micro Devices’ common stock.
Tesla Inc. will hold $1.5 billion bitcoin, which is not on JP Morgan’s list.
The least denomination for the new investment product, $1,000. The notes are expected to be out by March 31 and are expected to be settled by around April 6. As per JP Morgan, the weights of the reference stocks will be based on exposure to bitcoin, liquidity, and stocks’ performance. Together with 68% of the stocks are making the basket, noted the bank.
It is to be noted that JP Morgan has endorsed one per cent of allocation towards cryptocurrency recently, which was mentioned to the company’s clients in a note. According to the analysts, this allocation acts as a hedge against inflation in traditional asset classes like stocks, bonds and commodities. This activity was performed for launching more crypto-centric products.
In September 2017, Jamie Dimon, CEO, JP Morgan, was very negative about bitcoin and called it a fraud. The company has currently highlighted three key benefits of investing in Bitcoin. This was predicted after the company’s analysts said that the BTC price could go up to $146,000 as its competition with gold fires up. The company suggested the investors invest 1% of their money in cryptocurrencies.
With a background in journalism, Ritika Sharma has worked with many reputed media firms focusing on general news such as politics and crime. She joined The Coin Republic as a reporter for crypto, and found a great passion for cryptocurrency, Web3, NFTs and other digital assets. She spends a lot of time researching and delving deeper into these concepts around the clock, and is a strong advocate for women in STEM.
