The banking giant, J.P Morgan, seems to be considering entering into the bitcoin futures trading market by providing it’s clients with access to CME’s new btc futures offering to come out later this month.
This is surprising news because the CEO of J.P Morgan, Jamie Dimon has been rather critical in the news about the cryptocurrency. Calling bitcoin a fraud and chastising those who invest in it, saying those who invest in bitcoin are “stupid”.
Rather bold words for someone who is considering whether or not to enter into the btc market or not.
It has been reported by Wall Street Journal that J.P Morgan is currently in the discovery phase of entering the btc futures markets.
As CME and Cboe is venturing into the space and getting the right legal checks in place before deploying their contracts, other players have to take notice and look at the larger picture. They have to look at the risks and the benefits of the trend and see what their best option would be. Should they sit this move out or should they also jump into the fray.
Many are jumping into the fray in various ways, launching funds, etfs, contracts, etc that are bitcoin oriented but many of these are not the old guard, these are typically investors and groups with a different mindset.
We haven’t heard too much from other major banks in the U.S and other countries in regards to bitcoin and how they want to get involved but we do keep hearing from Chase.
With a large bank like Chase looking at the benefits of bitcoin futures and conducting a serious assessments, into what it means in the present and moving forward, it adds at the very least, some insight into the longevity of bitcoin.
The financial institution needs to also take into account the needs, requests and demands of it’s clients, if there is enough demand and the bank doesn’t respond, then the clients might go elsewhere, leading to lost revenue. At the same time, it needs to take into consideration the risks that it will be liable for in taking on the facilitation of these potential trades.
The source as reported by Bloomberg and others, does not want to be named because this topic is still being debated internally and deliberations are still proceeding.
The actions that are taken in this case may set a precedent for other banks and financial players allowing for further bitcoin penetration into the general market, thereby having more awareness and increased utility.
CME is aiming to have the futures derivative contracts deployed by the end of this year and it is still in the process of receiving approval and filing the necessary paperwork.
The top man at J.P Morgan may have his own personal feelings on the digital coin but if his customers want to speculate on the currency he has to give in at certain threshold, he is, after all, running a profit seeking entity.
There may be other factors at play leading to this possible about face on bitcoin but primarily, it has to be based on the increase in the value of the coin fueling further interest among more parties.
Bloomberg Tech notes that JPMorgan already allows clients some access to bitcoin through an exchange-traded note, which involves routing their orders to exchanges. Handling client trades of futures contracts is conceptually similar but could still pose some risks, according to the person.
Even if you’re the head of a large bank and state “If you’re stupid enough to buy it, you’ll pay the price for it one day” about a certain in demand good you still have to listen to the market and make your moves accordingly.