Financial services giant JPMorgan Chase & Co filed a prospectus with the United States Securities and Exchange Commission (SEC) to launch a new debt instrument tied to crypto-related companies.
According to the prospectus filed with the SEC, the debt instrument dubbed J.P. Morgan Cryptocurrency Exposure Basket will enable investors to allocate funds in a basket of crypto-focused companies. Some of those names include Michael Saylor’s MicroStrategy, which holds over $4.5 billion in BTC, Jack Dorsey’s Square, and Riot Blockchain.
At the moment, investors would have access to 11 Reference Stocks of U.S.-listed companies that are directly and indirectly involved in crypto businesses. The companies are selected based on their bitcoin holdings, crypto technology, BTC trading, digital payments, and mining products.
As per the filing, the estimated value of the notes would be priced at approximately $984.00 per $1,000 principal amount note. However, investors would have to pay a 1.5% deduction fee on its maturity date slated for May 5, 2022. Interestingly, this is the first time JPMorgan will be issuing notes based on the performance of crypto-related companies.
The move comes on the heels of the massive interest in cryptocurrencies from institutional players, as the asset class continues to rally ahead of other traditional financial instruments. Since late last year to date, the 11 companies on JPMorgan Cryptocurrency Exposure Basket have directly invested in Bitcoin (BTC) and have gotten a significant amount of profit.
While investors who want to take advantage of JPMorgan’s offering will not be directly investing in cryptocurrencies, as stated in the filing, the new initiative would give them the needed exposure to the crypto market, triggering their appetite for more.
It is no longer news that institutional players’ involvement in crypto is one of the fundamental forces driving the market to greater heights.