The largest bank in the USA, JPMorgan Chase, has registered a new financial product with the US Securities and Exchange Commission that allows investors to participate indirectly in the crypto market: a basket of shares of companies that are involved in crypto. Among them are obvious, but also surprising titles.
The ratio of JPMorgan Chase to Bitcoin and krypton is not entirely straightforward. The largest bank in the USA has been around in this regard for the past few months, sending sometimes positive and sometimes warning signals. Somehow it was clear that something was going on — but not what.
This question has now been answered. JPMorgan will not currently allow its customers to buy or hold cryptocurrencies directly. Instead, the bank would like to launch a financial product that allows investors to participate in the crypto market through conventional products: a basket of shares in 11 companies that, according to the SEC filing , “conduct business that, directly or indirectly, with Cryptocurrencies or other digital assets, which can be based on Bitcoin stocks, cryptocurrency technologies, mining products, digital payments or Bitcoin trading. “
The weighting of the stocks is based in part on the exposure to Bitcoin, the correlation to the Bitcoin price and the liquidity of the stocks. In this way, four companies make up 68 percent of the basket: MicroStrategy with 20 percent and Square with 18 percent shouldn’t come as a surprise — both companies hold considerable sums of Bitcoins, especially MicroStrategy, and Square, as a seller of Bitcoins in the CashApp, benefits from the success of the cryptocurrency . Riot Blockchain, a company of North American miners, followed with 15 percent, as well as — and this is where it gets surprising: the graphics card manufacturer Nvidia.
Actually clear: The mining of crypto currencies such as Ethereum, Litecoin, Dash or Dogecoin makes a decisive contribution to the demand for graphics cards from Nvidia. In order to better organize the strong demand, Nvidia recently announced that the mining performance of its gaming graphics cards will be throttled and cards specially made for mining. Accordingly, Nvidia’s share price also reflects, at least in part, the price trend of Bitcoin and other cryptocurrencies.
In contrast, the competitor AMD, whose graphics cards are also used for mining, is only represented with five percent in the share basket. Another five percent makes up TSM (Taiwan Semiconductor Manufacturing), the foundry from which most of the mining chips come, both on graphics cards and in Asics. Incidentally, this stock is the only one with which the basket covers the production of Bitcoin miners. Whether it actually makes sense to put such a large part of the basket — Riot, Nvidia, AMD and TSM — on mining is questionable. After all, the income from Bitcoin mining continues to decline, while Ethereum plans to switch to Proof of Stake, which means that cryptocurrencies that are mined by graphics cards are more likely to fall into a niche. Nvidia and AMD’s exposure to mining could come to an end sooner to the delight of gamers,
The other shares in the basket are in finance. PayPal is there with 10 percent, which is a surprisingly strong assessment of the importance of cryptocurrencies for the business of the payment service provider . Four percent each goes to Intercontinental Exchange, the parent company of Bakkt , the New York publisher of 1-day Bitcoin futures, and CME , the Chicago stock exchange, on which Bitcoin futures are also traded. With only two percent, the mail order company Overstock, which has been dealing with Bitcoin for a long time, and the Californian “crypto bank” Silvergate Capital, which bundles dollar transactions for investors and stock exchanges, make up the smallest weights in the share basket.
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