The new basket dubbed “J. P Morgan Cryptocurrency Exposure Basket” will track the equity of publicly-traded U.S companies that are either “directly or indirectly” invested in Bitcoin and cryptocurrency-related efforts.
According to the filing, the basket will track 11 reference stocks comprising of Class A or common stocks of companies such as MicroStrategy, Square, PayPal, Silvergate, Riot Blockchain, CME Group, OverStock, Advanced Micro Device, NVIDIA, and semiconductor giant TSMC (in the form of American depositary shares).
A section of the filing reads:
The notes are designed for investors who seek exposure to the performance of the J.P. Morgan Cryptocurrency Exposure Basket (Mar 2021) of unequally weighted Reference Stocks, which we refer to as the Basket, as reduced by the Basket Deduction of 3.00%. 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.
The minimum denomination for each note tracking the new basket of product is $1000, with the filing also detailing a pricing date of March 26 and the original issue date of “on or about March 31, 2021.” Observation and maturity dates are slated as May 2, 2022, and May 5, 2020.
Institutions Banking on the Crypto Boom
J.P Morgan’s latest foray into cryptocurrencies follows a growing list of traditional financial institutions’ efforts to offer clients some exposure to the burgeoning cryptocurrency market.
Last week, major competitor Goldman Sachs announced it was restarting its cryptocurrency trading desk and will also explore the possibility of launching a Bitcoin exchange-traded fund in the U.S.
Recently, BNY Mellon revealed it would offer Bitcoin services and launch a cryptocurrency-focused unit later this year.