JPMorgan is the first major U.S. bank to offer all of its wealth management clients access to crypto funds. The bank gave the green light to its financial advisors to begin offering a number of crypto financial products.
U.S. financial services firm JPMorgan has given its financial advisors the green light to offer five cryptocurrency products effective immediately, according to Business Insider. The new option is now open to all clients seeking investment advice. This includes self-managing clients in the commission-free Chase trading app, the mass of affluent clients who have their assets managed by JPMorgan Advisors, and the institutional clients with the full-service package.
Bank's change of heart
The move marks a milestone for the bank. As recently as 2017, CEO Jamie Dimon threatened employees with being fired if they traded digital assets. After all, he said, Bitcoin was a "scam" and comparable to the Tulip Mania. While Dimon has since adjusted his stance on crypto assets, he is still not a proponent of the asset class. Still, he doesn't want to keep cryptocurrency investments from his clients. JPMorgan could already see the strong demand as early as December.
JPMorgan's asset and wealth management chief executive, Mary Callahan Erdoes, told Bloomberg that many of the bank's clients see cryptocurrencies as an asset class and want to invest in them. Advisors, however, cannot execute "unsolicited" crypto transactions. They are not allowed to recommend the products, they can only buy or sell them on behalf of a client request. The cleared funds include Grayscale's Bitcoin Trust, Bitcoin Cash Trust, Ethereum Trust, and Ethereum Classic vehicles, as well as Osprey Funds' Bitcoin Trust.
Exclusive offering by the major bank
The U.S. bank has been recognizing increased institutional interest for a while now, attesting to the asset class's longevity. For example, JPMorgan announced back in April that they plan to launch an actively managed Bitcoin fund for private wealth clients this summer. They have also launched a new blockchain company focused on global payments and transactions between banks.
Rival banks such as Goldman Sachs, Morgan Stanley and Bank of America do not give their retail clients direct access to crypto products. In most cases, investments are only available to high-net-worth clients (i.e. $2 million or more in assets at Morgan Stanley). Goldman Sachs also recently began offering crypto futures trading, but only for institutional clients and hedge funds.