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JPMorgan on Tuesday filed a note with the SEC launching a structured investment product linked to the performance of its “Cryptocurrency Exposure Basket” which tracks stocks of publicly traded companies with exposure to cryptocurrencies. The aim is enable exposure to crypto for it's clients.

JP Morgan Bitcoin

JPMorgan's cryptocurrency basket is made of 11 unequally weighted stocks that are directly or indirectly related to cryptocurrencies or other digital assets. The minimum denomination for the new investment product is $1,000. The notes are expected to price on or about March 31 and are expected to settle on or about April 6.

“The weights of the reference stocks were determined based in part on exposure to bitcoin, correlation to bitcoin and liquidity,” JPMorgan further clarified. “The basket may be subject to extreme price volatility and rapid and substantial decreases in price over the term of the notes.”

The weights of the stocks in the basket were determined based in part on each company's exposure to bitcoin and liquidity

Of note the SEC has not given approval to a cryptocurrency backed ETF.'

"The notes are designed for investors who seek exposure to the performance of the J.P. Morgan Cryptocurrency Exposure Basket (Mar 2021) of 11 unequally weighted reference stocks, which we refer to as the basket, as reduced by the basket deduction of 1.50%." JP Morgan in SEC filing

JPMorgan Cryptocurrency Exposure Basket'

The main stocks in the basket are Class A common stocks of:

  • MicroStrategy MSTR (20%),
  • Square SQ (18%)
  • Riot Blockchain(15%)
  • NVIDIA Corporation NVDA (15%)

JP Morgan Crypto Note

“Notwithstanding the name of the basket, the notes do not provide direct exposure to cryptocurrencies and the performance of the basket may not be correlated with the price of any particular cryptocurrency, such as bitcoin.”

Source: SEC

From The TradersCommunity Research Desk

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