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.

article-image

Source: Shutterstock

share

key takeaways

  • 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 

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. 

JPMorgan

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.

Want more investor-focused content on digital assets? Join us September 13th and 14th for the Digital Asset Summit (DAS) in NYC. Use code ARTICLE for $75 off your ticket. Buy it now.

Tags

Upcoming Events

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Pack your bags, anon — we’re heading west! Join us in the beautiful Salt Lake City for the third installment of Permissionless. Come for the alpha, stay for the fresh air. Permissionless III promises unforgettable panels, killer networking opportunities, and mountains […]

recent research

Avail.jpg

Research

Data publishing costs have historically been a bottleneck for rollups, and as more rollups launch, interoperability will continue to be a major challenge. Avail presents a potential solution to rollup fragmentation through its three products: Avail DA, Nexus, and Fusion, which together aim to unify the web3 experience.

article-image

Like any new idea, restaking protocols will need a long break-in period to ensure their technical safety — but that’s doesn’t mean they’re not extremely promising

article-image

The Nakamoto upgrade will enhance transaction throughput and enable Bitcoin finality for layer-2 transactions

article-image

Miners may not have even noticed the halving took place over the weekend, with fees largely making up the difference so far

article-image

Research analyst Mark Palmer starts coverage of the bitcoin miner and puts its price target 50% higher than its current level

article-image

Runes, crypto taxes and Binance’s execs stuck in Nigeria

article-image

The US fund segment snapped a five-day net outflow streak on Friday ahead of the bitcoin halving that night