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JPMorgan Chosen by Blackrock as Authorized Participant for Bitcoin ETF, Despite Crypto Ban Disapproval from Jamie Dimon

JPMorgan Takes the Lead Role in Blackrock’s Bitcoin ETF, Irrespective of Jamie Dimon’s Crypto Criticism

In a surprising move, Blackrock, the world’s biggest asset manager, has appointed JPMorgan as a primary authorized participant for its spot Bitcoin Exchange Traded Fund (ETF). This happens despite the overtly negative comments about Bitcoin and cryptocurrencies made by JPMorgan CEO, Jamie Dimon, in a recent congressional hearing.

A Unexpected End to the SEC’s Deadline

As the deadline set by the U.S. Securities and Exchange Commission (SEC) approached, Blackrock submitted an updated filing for its spot Bitcoin ETF. The SEC had clarified that it wished to see the names of authorized participants (APs) in the revised filings. Blackrock’s modified filing revealed that JPMorgan and Jane Street have been named the authorized participants for its Bitcoin ETF.

This comes as a surprise considering that just a short while ago, JPMorgan CEO, Jamie Dimon, expressed his willingness to shut down cryptocurrencies if he were in government. He emphasized his belief that Bitcoin and other cryptocurrencies are primarily used for illicit activities.

Despite Dimon’s unfavourable viewpoint of cryptocurrencies, JPMorgan still accepted Blackrock’s proposal. Gabor Gurbacs, Vaneck’s director of digital assets strategy, expressed his thoughts on social media, questioning the credibility of Dimon’s statements. This sentiment has been echoed across various social media platforms, with many questioning Dimon’s contradictory behaviour.

ETF Contenders Submit Amended Filings

In addition to Blackrock, numerous other spot Bitcoin ETF contenders including Vaneck, Valkyrie, Bitwise, Invesco/Galaxy, Fidelity, Wisdomtree and a joint proposal by Ark Investments and 21shares also submitted their amended filings to the SEC. All of them aim to have their ETFs considered in the primary round of approvals.

Many believe that the approval of these spot Bitcoin ETFs would elevate the price of BTC, but this perspective isn’t shared by JPMorgan strategists. According to a recent piece they penned, spot Bitcoin ETFs could expose Bitcoin prices to severe downward pressure. Meanwhile, despite the contradictory opinions, Blackrock has declared its intent to seed its spot Bitcoin ETF with $10 million at the start of the new year.

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Frequently asked Questions

1. What is the significance of JPMorgan being chosen as an authorized participant for the Bitcoin ETF?

JPMorgan being chosen as an authorized participant for the Bitcoin ETF means that they will play a crucial role in the creation and redemption of ETF shares. This allows them to directly buy or sell the underlying Bitcoin assets, providing liquidity to the ETF market.

2. How does JPMorgan’s authorization as an ETF participant align with Jamie Dimon’s disapproval of cryptocurrencies?

Despite Jamie Dimon’s public disapproval of cryptocurrencies, JPMorgan’s authorization as an ETF participant for Bitcoin shows that the bank is willing to embrace the potential profitability and client demand associated with this emerging asset class.

3. What does Blackrock’s selection of JPMorgan as an authorized participant indicate?

Blackrock’s selection of JPMorgan as an authorized participant suggests that they trust JPMorgan’s expertise and capabilities in handling Bitcoin assets. It also demonstrates that JPMorgan’s reputation and position in the financial industry are strong enough to be chosen for such a critical role.

4. Will JPMorgan’s involvement in the Bitcoin ETF affect their stance on cryptocurrencies?

While JPMorgan’s involvement in the Bitcoin ETF may not directly change their stance on cryptocurrencies, it does indicate that they are willing to explore and capitalize on opportunities within the crypto market. However, it’s important to note that the bank’s overall stance on cryptocurrencies may still be influenced by other factors.

5. How will JPMorgan’s participation affect the overall acceptance and legitimacy of Bitcoin ETFs?

JPMorgan’s participation as an authorized participant for the Bitcoin ETF adds credibility to the market and enhances its legitimacy. Their involvement may encourage other financial institutions to consider engaging with Bitcoin ETFs, potentially leading to greater acceptance and adoption of these investment vehicles.

6. What potential benefits can be expected from JPMorgan’s participation in the Bitcoin ETF?

JPMorgan’s participation in the Bitcoin ETF can bring several benefits, including increased liquidity in the ETF market, improved price discovery mechanisms, and enhanced investor confidence. Additionally, their involvement can attract more institutional investors to the crypto space, further driving its growth.

7. Does JPMorgan’s authorization as an ETF participant indicate a change in their overall cryptocurrency strategy?

While JPMorgan’s authorization as an ETF participant may suggest a shift in their approach to cryptocurrencies, it is essential to recognize that it may be a strategic move to adapt to market demand rather than a complete reversal of their previous views. The bank’s broader cryptocurrency strategy might still involve cautiousness and a focus on regulatory compliance.