Wall Street's Bitcoin Bombshell: JPMorgan Unlocks Crypto for Big-Money Loans
This article first appeared on GuruFocus.
JPMorgan Chase & Co. (NYSE:JPM) is preparing a move that could redefine how Wall Street treats digital assets. By the end of the year, the bank will allow institutional clients to pledge Bitcoin (BTC-USD) and Ether as collateral for loans a first-of-its-kind step for a major U.S. lender. The program, which will use a third-party custodian to safeguard tokens, expands on JPMorgan's earlier acceptance of crypto-linked ETFs as collateral. With Bitcoin rallying this year and the Trump administration easing crypto regulations, JPMorgan's decision signals that digital assets are no longer living on the financial fringe they're entering the mainstream of bank financing.
It's also a symbolic turn for Jamie Dimon. The same CEO who once called Bitcoin a pet rock is now overseeing a bank ready to treat it like any other security. Dimon hasn't become a crypto evangelist far from it but his tone has shifted. I don't think we should smoke, but I defend your right to smoke, he said earlier this year when asked about Bitcoin ownership. The timing aligns with the sector's resurgence: Bitcoin hit a record $126,251 earlier this month, and investor demand for crypto-based financing is rising fast.
The shift isn't just about JPMorgan. Wall Street's biggest names are moving too. Morgan Stanley is preparing to open crypto access to retail investors via E*Trade next year. State Street, BNY Mellon, and Fidelity have all expanded their custody offerings, while BlackRock has been cleared to let investors swap Bitcoin for ETF shares tracking the token. With the European Union, Singapore, and the UAE already enforcing clear crypto rules and Congress pushing new legislation JPMorgan's move could be the clearest signal yet that digital assets are becoming part of traditional collateral frameworks worldwide.
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