JP Morgan Embraces Bitcoin as Collateral

JP Morgan Chase, America's largest bank, will begin offering clients loans backed by Bitcoin ETF holdings in a landmark move that signals Wall Street's growing recognition of cryptocurrency as legitimate collateral.

The development represents a dramatic shift for traditional banking, with institutions now treating Bitcoin as liquid, globally accessible collateral available 24/7/365.

The firm will start providing financing against crypto exchange-traded funds, beginning with BlackRock's iShares Bitcoin Trust, in the coming weeks, according to a report in Bloomberg on Wednesday.

In some cases, JP Morgan will also begin taking wealth-management clients' crypto holdings into account when assessing their overall net worth and liquid assets, the report said. This means cryptocurrencies will receive similar treatment to traditional assets like stocks, cars, or art when calculating borrowing capacity.

The shift represents a significant departure from JP Morgan's previous approach. The bank previously allowed some clients to use their crypto ETFs as collateral only on a case-by-case basis, but will now systematically integrate these digital assets into its lending framework.

In wealth management, the changes apply to all of the bank's clients globally, spanning multiple levels of wealth – from retail customers to high-net-worth individuals, according to sources familiar with the matter.

Dimon's Pragmatic Pivot

The announcement comes despite CEO Jamie Dimon's well-documented skepticism toward Bitcoin. Dimon said at the firm's investor day in May that he's "not a fan" of Bitcoin, but that JP Morgan would allow clients to buy it .

"I don't think we should smoke, but I defend your right to smoke," Dimon said at the time. "I defend your right to buy Bitcoin, go at it."

This pragmatic approach reflects Wall Street's broader evolution on cryptocurrency. Rather than personal endorsement, banks are responding to client demand and regulatory clarity under the Trump administration's crypto-friendly policies.

The decision to accept Bitcoin ETFs as collateral validates a key thesis among cryptocurrency advocates: that Bitcoin functions as "pristine collateral" due to its unique properties. Unlike traditional assets, Bitcoin and Bitcoin ETFs offer global liquidity, transparent pricing, instant settlement, and immutable ownership.

Spot Bitcoin ETFs were introduced in the US in January 2024 and have swelled to oversee a combined $126.67 billion as of June 4, according to SoSoValue data, making them one of the most successful launches ever. The rapid growth demonstrates institutional appetite for Bitcoin exposure through regulated investment vehicles.

JP Morgan was one of the first major banks to start using blockchain technology for services like payments, and counts crypto exchanges like Coinbase Global among its clients. The bank's latest move builds on this foundation while maintaining a measured approach to direct crypto exposure.

The bank has indicated it will expand beyond BlackRock's Bitcoin ETF. Other crypto ETFs are expected to be included after the change is made, suggesting a broader embrace of cryptocurrency-linked financial products.

The move also validates the ETF structure as a bridge between traditional finance and cryptocurrency. Rather than holding Bitcoin directly, banks can engage with cryptocurrency through regulated investment vehicles that fit existing compliance frameworks.

The next phase will likely see other major banks following suit, potentially creating a new standard where cryptocurrency holdings become routine considerations in wealth management and lending decisions across Wall Street.