JPMorgan to Allow BlackRock Bitcoin ETF Shares as Loan Collateral

Wall Street giant JP Morgan plans to allow its wealthy clients to use shares in crypto ETFs, like BlackRock’s iShares Bitcoin Trust, as collateral for loans.

Unnamed sources familiar with the matter told Bloomberg, who first reported the news, that the bank will also begin taking crypto holdings into account when assessing clients’ net worth and liquid assets. This would mean that crypto gets the same treatment as real estate and vehicles when assessing a client’s ability to repay a loan.

“We can confirm the contents of the Bloomberg story are accurate,” a JP Morgan spokesperson told Decrypt in an email.

The bank has had a love-hate relationship with Bitcoin.

JPMorgan CEO Jamie Dimon has long been a Bitcoin skeptic, but recently said the bank would begin allowing customers to trade Bitcoin and Ethereum.

The billionaire banker has said that Bitcoin is a “pet rock” and that crypto’s “true use case” was for criminals.

But the bank has long used blockchain—a technology launched by Bitcoin’s creator—for its own projects to move money.

JP Morgan is the latest high-profile traditional finance giant to offer clients exposure to crypto—a multi-trillion dollar asset class. The likes of Fidelity and Standard Chartered have also this year launched digital asset trading services for both institutional and retail clients.

The Securities and Exchange Commission last year approved Bitcoin and Ethereum ETFs, giving investors previously shut out from the crypto investing world the ability to buy and sell digital assets via shares that trade on a stock exchange.

Managed by the likes of BlackRock, Fidelity, and Grayscale, the funds have been highly popular, with the Bitcoin products having the most successful launch in the history of ETFs.

BlackRock’s iShares Bitcoin Trust (IBIT) has led the charge, and currently has over $70 billion in assets under management.

Editor’s note: This story was updated to add a comment from JP Morgan.