Wells Fargo, JPMorgan Set To Launch Passive Bitcoin Trusts
Wells Fargo and JPMorgan Chase both partnered with NYDIG for the launch of two passive bitcoin trusts, according to SEC filings.
- In partnership with NYDIG, JPMorgan filed with the SEC to offer its passively managed bitcoin fund to in-house clients on August 19
- Wells Fargo’s wealth and investment management arm oversees around $2 trillion in assets, as of May
Wells Fargo and JPMorgan both registered a passive bitcoin trust with the Security Exchange Commission on Thursday. The two mega-banks separately partnered with NYDIG for the trusts, according to SEC filings.
In JPMorgan’s case, NYDIG would hold the cryptocurrency while the bank would be used as a sales agent. The trust will allow its wealthiest client base to utilize its crypto investment vehicle. In Wells Fargo’s case, the bank will also be working with FS Investments on the offering.
Wells Fargo said in a May report on “The investment rationale for cryptocurrencies” that it believes that cryptocurrencies have evolved into a viable investment asset. “There are over 9,000 cryptocurrencies, with $2.4 trillion in capitalization, and this depth and breadth allow additional analysis of their trends,” the report said. “Short-term factors suggest further deepening of the market. We believe long-term supply and demand trends support further industry growth, the potential for further compression in price volatility, and a possible role as portfolio diversifiers.”
However, this is not the first time the US financial institution has attempted to expand into digital asset investment services. In May, Wells Fargo announced that they would soon allow certain clients the opportunity to invest in crypto through their services.
Wells Fargo Investment Institute president Darrell Cronk said the bank will offer a“professionally managed solution” to its wealthiest clients in mid-June, according to an Insider interview. (Wells Fargo’s wealth and investment management arm oversees around $2 trillion in assets, as of May.)
“We think the cryptocurrency space has just kind of hit an evolution and maturation of its development that allows it now to be a viable investable asset,” Cronk said.
In a partnership with NYDIG, JPMorgan also filed for a passive bitcoin trust with the SEC on Thursday. (NYDIG would hold the cryptocurrency while the massive bank would act as their sales agent.)
JPMorgan originally became the first US mega-bank to give wealth management clients access to cryptocurrency funds through its advisors in June. Leading up to Thursday’s filing, the financial institution offered its passively managed bitcoin fund to in-house clients in early-August. This was two of many recent efforts by large financial institutions to try and adopt crypto-related services for their qualified clients.
NYDIG, the subsidiary of Stone Ridge Asset, gives BTC investment opportunities to banks, corporations and high net worth individuals. In June, NYDIG partnered with NCR to allow over 650 US banks and credit unions to soon offer cryptocurrency trading and bitcoin transactions to 24 million customers.
Following Thursday’s onslaught of bullish news, bitcoin was trading flat at $45,932.43 as of press time.