- JPMorgan will let clients use BlackRock's Bitcoin ETF as collateral.
- Crypto holdings will also be factored into net worth calculations.
- The move comes amid a regulatory thaw.
JPMorgan Chase & Co. is opening its doors to crypto in a way it has never done before.
The top bank in the US by assets will soon let clients use shares of Bitcoin ETFs as collateral for loans, starting with BlackRock’s IBIT, according to Bloomberg News.
The New York-based lender will also factor crypto holdings into net-worth calculations.
Previously, the bank reviewed this type of financing on a case-by-case basis.
It shouldn’t come as a surprise that BlackRock’s Bitcoin ETF will be the first of its kind to be used as collateral for loans from JPMorgan.
The fund commands more than half of the $125 billion spot Bitcoin ETF market. In fact, its $67 billion Bitcoin stash has prompted some to say it could soon leapfrog Satoshi Nakamoto as the largest Bitcoin holder.
‘Fraud’
The policy shift is a dramatic about-face for one of America’s largest banks.
JPMorgan CEO Jamie Dimon has previously called Bitcoin a “fraud,” “worthless,” and a “pet rock.”
“If I was the government, I’d shut it down,” he told Congress in 2023.
Even as JPMorgan experimented with private blockchains and tokenizing real-world assets, it kept Bitcoin at arm’s length.
But Dimon began to soften his tune last year.
”I don’t know what the Bitcoin itself is for, but I defend your right to buy a cigarette, I’ll defend your right to buy a Bitcoin,” Dimon reportedly said during the Australian Financial Review business summit.
Regulatory thaw
Now, it is adapting to growing demand for crypto products amid the regulatory thaw promised by US President Donald Trump.
Indeed, the changes offer a glimpse into how traditional finance is embracing — instead of rejecting — crypto. Other Wall Street giants like Charles Schwab and Morgan Stanley have also joined the crypto race.
A lot of the fuel comes from the wild success of Bitcoin ETFs — especially BlackRock’s IBIT. Barely 16 months old, the fund has become one of the 25 largest ETFs.
Bitcoin ETFs collectively hold more than 1.1 million Bitcoin worth around $125 billion.
JPMorgan will eventually allow customers to borrow against other Bitcoin ETFs, Bloomberg reported.
Pedro Solimano is a markets correspondent based in Buenos Aires. Got a tip? Email him at psolimano@dlnews.com.
