JPMorgan Will Actively Manage a Bitcoin Fund for Customers, Outsourcing Custody to NYDIG

JPMorgan Chase, the world’s largest bank in terms of market cap, announced that it will now let customers buy Bitcoin. Jamie Dimon, CEO of JPMorgan, said he did not like Bitcoin but understood that customers deserve the right to choose which assets they invest in. The remarks by Dimon come at a JPMorgan investor day event, which aims to promote the bank and champion its progress. JPMorgan has a market cap of $740 billion, making it the largest bank in the world. JPMorgan manages over $4 trillion in assets, adding to its reputation and pride when dealing with investment preferences. Dimon has a history of disparaging Bitcoin, calling it a fraud, and during a Senate hearing with Elizabeth Warren, saying that he would close it down if he were in charge. Such statements, however, could not stop the tide of history, with many investors demanding that JPMorgan let them buy Bitcoin.

Despite its CEO disparaging Bitcoin, JPMorgan will release a managed fund for Bitcoin investors. JPMorgan will actively manage the fund, but will not maintain custody of a Bitcoin wallet. The mega bank seems to be the least likely institution to embrace Bitcoin, given the comments made by its CEO. The new Bitcoin fund will be released this summer. The custody of cryptocurrencies will be outsourced to NYDIG, a crypto company. JPMorgan will actively manage the Bitcoin fund, a new development because many fund managers like Pantera Capital allow clients to invest in Bitcoin without handling it themselves.

Dimon has been very vocal about his criticism of Bitcoin, even going so far as to say that he would fire any JPMorgan employee who traded the digital asset. He said that the act of trading Bitcoin was “stupid” and noted that Bitcoin has no “intrinsic value”, which most likely refers to the fact that Bitcoin doesn’t have cash flows. However, Bitcoin is an unprecedented financial innovation. Dimon also said that criminals use Bitcoin. However, fiat currency is still the preferred medium for crime. JPMorgan, meanwhile, is investing in blockchain technology, executing its first transaction on a public blockchain last week.

Dimon, meanwhile, is more concerned about the economy. He says that the risk of stagflation is most likely two times the amount factored in by the market. Dimon believes that stagflation will cause many problems for banks and companies. Dimon has both positive and negative things to say about Trump’s administration. He praises regulatory efforts and states that there is a clear motive to fix problems in that area. But he also points out that JPMorgan has lost a lot of business due to Trump’s tariff war.

Dimon seems to flip-flop on his attitude towards Bitcoin. The JPMorgan CEO said he thinks blockchain is overrated and less important than people think. This recent statement during his speech this week contrasts with his previous comments about blockchain, where he has treated blockchain innovation separately from Bitcoin and even supported practical blockchain projects. Regardless of Dimon’s remarks, JPMorgan ran its first transaction on a public blockchain last week and has its own blockchain-based JPM coin.