Institutional Tsunami

JP Morgan Offers Bitcoin Fund and MasterCard Rolls Out Crypto Products

Following a tumble in prices, this was a strong week for crypto markets that saw the partial recovery of most coins, including Bitcoin. This came coupled with continued support from major financial institutions featuring big names like Mastercard and JP Morgan. 

JP Morgan Ready to Offer Big Clients Access to Bitcoin

It was only three years ago that JP Morgan’s CEO Jamie Dimon was on camera saying, “I could care less about Bitcoin,” yet the firm appears to be whistling a different tune now. Signaling the ultimate mainstream adoption move after snubbing crypto during its early years, JP Morgan has now announced plans to roll out a Bitcoin fund to select wealthy clients. The latest of the megabanks and Wall Street institutions to grant access to cryptocurrency, JP Morgan is set to launch this product as soon as this coming summer. This is a far cry from the firm’s long-standing position regarding crypto, as it had previously branded it as “a fraud”. 

Unlike most of the Bitcoin funds in the space which is passive, this will reportedly be an actively managed fund. This means that clients’ bitcoin investments would be tracked by analysts and investors regularly, who would then make decisions to buy, hold, or sell periodically. This is anticipated to cause even more price fluctuations for Bitcoin as investors continuously react to the ebb and flow of the market. 

Providing the custody service on this product is the bitcoin investment arm of Stone Ridge Asset Management, New York Digital Investment Group (NYDIG). This transformational product will push Bitcoin to the most traditional and mainstream of investors. 

Also noteworthy is JP Morgan partnering up with Singapore’s largest bank DBS and Singapore’s state-owned investment firm Temasek to announce a joint venture to develop a blockchain-based payment network that promotes cross-border transactions. Named Partior, this solution will enable transactions 24/7 at lowered fees, harnessing the benefits of blockchain technology and smart contracts while working to “address current points of friction,” said Piyush Gupta, CEO of DBS. JP Morgan’s Global Head of Wholesale Payments Takis Georgakopoulos was quoted saying, “J.P. Morgan is committed to being a leader in this space as our clients’ transition towards multiple bank platforms, decentralized networks, and programmable money”. 

Previously, the investment and banking firm had created the permission-based Ethereum blockchain, Quorum, as well as the JPM Coin — a tokenized form of money. This further illustrates the global banking giant’s commitment to a new financial order, one that is built around a model of decentralized finance. Clearly, the transition has begun for one of the most traditional Wall Street institutions. 

Mastercard’s New Crypto Credit Card Turns Heads

Also in the realm of mainstream institutional support, Mastercard has announced the rollout of a 3% crypto cash-back credit card set to launch this summer. With this launch, the payments giant joins Visa which also recently released a credit card that offers crypto rewards for usage. Created in partnership with the US currency exchange Gemini, Mastercard cardholders will earn up to 3% back on qualifying purchases in Bitcoin or any of the 30 cryptocurrencies available on the exchange. The rewards will be deposited in the cardholders’ Gemini account, and unlike most cards that pay rewards out monthly, cardholders will receive their crypto rewards as the transaction occurs. This will allow clients to benefit from rewards instantaneously. 

Speaking on the matter, Mastercard’s head of digital assets, blockchain products, and partnerships Raj Dhamordharan said, “As consumers go about spending in various acceptance locations, now they get a chance to earn a reward in the form of crypto”. 

Just last week, PayPal’s payment service app Venmo launched a “Crypto on Venmo” product allowing their 70 million users to buy, sell, and hold crypto right on the application. 

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US Bank Backs Institutional Crypto Builder in Funding Round

More mainstream banking attention to crypto comes in the form of the financial backing of a major blockchain builder. American bank holding company US Bank has backed the institutional crypto builder Securrency with $30 million in funding, providing another vote of confidence to the integral nature of blockchain technology to the future of banking. 

The CEO and Co-Founder of Securrency Dan Doney called this funding “a huge milestone for Securrency,” and revealed that with this fresh capital on hand, the firm aims to launch new products and expand internationally. Securrency provides blockchain-based tools for banks and financial institutions, meaning it is a service provider for many financial institutions venturing into crypto and blockchain. 

From a disruptive power to a vehicle for change, traditional banks have finally started viewing decentralized finance as a solution, solidifying that both cryptocurrencies, as well as their foundational blockchain technology, are becoming ever more vital for the future of banks. Blockchain banking is right around the corner, and cryptocurrency is increasingly drifting into the mainstream domain. 

Bitcoin was trading at $54,900 at the time of publishing, while Ether was up at $2,737 having hit a fresh all-time high. 


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