JPMorgan Becomes First Big Bank To Give Retail Wealth Clients Access To Crypto Funds

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by Tyler Durden
Thursday, Jul 22, 2021 - 12:55 PM

We sure have gone a long way the past 4 years. Back in September 2017, billionaire JPMorgan CEO Jamie Dimon lashed out at a relatively new - for boomer institutional investors - asset class, bitcoin, which Dimon said “won’t end well,” predicting it will eventually blow up as “it’s a fraud” and “worse than tulip bulbs.” And the kicker: the CEO of the largest US bank said he would fire any employee trading bitcoin for being “stupid.”

Fast forward to today when everything has changed: not only has JPM launched a bitcoin fund for rich clients after years of bashing crypto, its market quants publishing a weekly hitpiece bashing bitcoin and its crypto peers, but it now published a weekly report looking at all the latest news and trends in the crypto realm...

... but as Insider reports today, JPMorgan has become the first major bank to "gave its financial advisors the green light to give all its wealth-management clients access to cryptocurrency funds." The move applies to all JPMorgan clients seeking investment advice, including its bank's self-directed clients using its commission-free Chase trading app, mass affluent clients whose assets are managed by financial advisors under JPMorgan Advisors, and ultrarich clients serviced by the private bank.

The bank, which has been making a significant push to grow its $630 billion wealth-management business, told advisors in a memo earlier this week that they can now take orders to buy and sell five cryptocurrency products, four from Grayscale Investments and one from Osprey Funds, effective July 19.

For now, JPMorgan's advisors can execute only "unsolicited" crypto trades, meaning advisors cannot recommend the products but are allowed to buy or sell on the behalf of a client's request, but should enough clients defer the decision to their advisors, we are confident this too will change.

The funds JPMorgan has approved include Grayscale's Bitcoin Trust, Bitcoin Cash Trust, Ethereum Trust, and Ethereum Classic vehicles, as well as Osprey Funds' Bitcoin Trust, Insider reports.

Ironically, the latest attempt to generate even more commission revenues for the bank whose deposits have exploded even as loan growth has remained stagnant at best, comes after Jamie Dimon said in May that he is still not a supporter of the asset class. But that doesn't matter as long as the bank's clients are and are willing to pay JPM commissions for the trades.

Rival banks such as Goldman Sachs, Morgan Stanley, and Bank of America have not given retail wealth clients direct access to crypto products. CNBC previously reported that Morgan Stanley was the first big bank to begin offering wealthy clients — those with at least $2 million in invested assets — access to bitcoin funds, through a partnership with Galaxy Digital in April.