JP Morgan is finally offering bitcoin investment options to its customers after years of aversion to crypto investing, and is reportedly promoting its bitcoin product to its retail customers. However, the bank should be prepared for competition from cryptocurrency exchanges and similar banks.
Sceptic becomes a believer
After JP Morgan Chase discovered the potential of cryptocurrencies, the bank added Bitcoin to the list of assets its clients can invest in. Everything JP Morgan is doing now in regards to Bitcoin has proven to be a difficult endeavour.
The CEO of JP Morgan Jamie Dimon is one of the best-known Bitcoin sceptics, having once threatened to fire any of his employees caught trading Bitcoin and repeatedly calling cryptocurrencies a “fraud”. However, his reservations about Bitcoin and other cryptocurrencies could not be sustained for too long.
In 2019, JP Morgan launched JPM Coin, the firm’s own cryptocurrency designed for its institutional clients, according to CoinIdol, a world blockchain news outlet. Two years later, its wealthy clients have access to Bitcoin! It’s time for Jamie Dimon to come clean.
“On the other hand, clients are interested, and I don’t tell clients what to do,”
Jamie Dimon told Wall Street Journal, adding to his original “never Bitcoin” statement.
JP Morgan Chase is now one of the largest banks in the world to support cryptocurrency investing after officially launching its Bitcoin fund with NYDIG for its wealthy clients.
Although JP Morgan is America’s largest bank, with total assets of $3.4 trillion, more than the GDP of all African countries combined, it is still uncertain whether it will gain the leading position in Bitcoin trading. In fact, it is not the only bank that has partnered with NYDIG. In partnership with NCR, the company aims to provide cryptocurrencies to 650 banks, reaching 24 million people. It’s a great competition, isn’t it?
On the other hand, more competition is coming from crypto exchanges. There are a total of 307 crypto exchanges worldwide, with several hundred of them in the US. In particular, Binance, Coinbase, Kraken, FTX.US, Gemini, eToro, and other major crypto exchanges represent strong competition for JP Morgan or other banks interested in crypto businesses. Moreover, these exchanges have built solid reputations and trust in their services, so potential users are more likely to turn to them than to a traditional financial institution, no matter how reputable.
Although JP Morgan is highly regarded by Americans and has a large customer base around the world, it may have to work harder to outperform already established cryptocurrency exchanges and banks with similar interests. Cryptocurrencies are the talk of the town these days. Many Forbes billionaires have invested in them and amassed wealth. Micheal Saylor, Changpeng Zhao, Matthew Roszak, Tim Draper and others are all products of cryptocurrencies. They are now on the list of global billionaires along with the likes of Jamie Dimon. The renewed interest in cryptocurrencies by financial institutions is driven by the rise in the value of digital assets.