JPMorgan Chase has reportedly designed a new debt instrument that offers investors direct exposure to a group of crypto-focused firms, based on a new filing with the US Securities and Exchange Commission (SEC). The financial services giant has already filed paperwork with the SEC to launch a debt infrastructure that is linked to 11 crypto-focused companies.
By description, JPMorgan’s Cryptocurrency Exposure Basket (Mar 2021) is an “unequally weighted basket consisting of 11 Reference Stocks of U.S.-listed companies.” It operates businesses, directly and indirectly, related to cryptos.
The instrument allocates up to 20% to MicroStrategy, the data analytics firm that has 91,064 BTC on its balance sheet. It also offers direct exposure to Square (18%) and Riot Blockchain (15%), two firms that have considerable exposure to Bitcoin. Nvidia Corporation and PayPal Holdings each account for 15% of the basket.
Advanced Micro Devices, Taiwan Semiconductor Company, Overstock.com, Intercontinental Exchange, Silvergate Capital, and CME Group are also included in this basket. The prospectus says:
“The weights of the Reference Stocks were determined based in part on exposure to Bitcoin, correlation to Bitcoin and liquidity.”
JPMorgan states that payouts are based on the way the basket of companies performs. For now, the minimum investment is set at $1,000 with a maturation date of May 2022. This new product represents one of the many available strategies through which institutional investors can gain access to the high-flying crypto market.
Currently, Wall Street is already joining the digital currencies world. The flocking majorly explains the strong price support underlying bitcoin. The biggest digital currency traded as high as $54,888 on March 9, according to data from TradingView.
The recently launched Purpose Bitcoin exchange-traded fund shows that it is highly likely that traditional investors have a growing appetite for digital assets. The Canadian ETF recorded almost $100 million in volume during its debut earlier in March, putting it on track to surpass $1 billion in assets after the first week.