• JPMorgan releases a Bitcoin-linked note, which provides returns depending on BTC’s price surge. 
• Its product is tied to the IBIT ETF and is targeted towards investors who would like exposure but not want to hold crypto directly. 
• Institutional demand for this product has increased after a similar note by Morgan Stanley recorded over $100 million in sales. 

JPMorgan has released an investment note allowing customers to make money when Bitcoin dips next year but rises by 2028. This is an indication that top Wall Street institutions are developing products associated with digital assets. 

Structured Note Offers Tiered Returns

According to the SEC filing, the note has been linked to the iShares Bitcoin Trust ETF (owned by BlackRock). This fund tracks the spot price of Bitcoin. The instrument works as a note combining traditional security with a derivative payoff depending on the performance of the ETF.

JPMorgan will establish a price level for the IBIT fund within the next month. If after one year, the ETF trades at a certain level or above, the note gets recalled automatically. Then, investors are paid a fixed reward of 16%. But in case it trades below that level in this period, the note will still be active until 2028.  

Also, if IBIT exceeds the second price threshold set by JPMorgan at the end of 2028, investors can get 1.5X gains in returns. However, a decline of up to 30% in the ETF’s price as of 2028 results in capital protection.

Hence, only the complete initial capital will be paid to investors. Also, in case the decline is more than 30%, the investors would lose the value equivalent to their investment.  

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Conventional Investors Accept Bitcoin Exposure  

The design of this product is favorable to investors who expect a decline in the market in the short term but a steep increase. The growing popularity of the BlackRock Bitcoin ETF is now a reference point for conventional investors looking for crypto exposure. 

Hence, the involvement of JPMorgan indicates that traditional financial institutions are getting more comfortable with BTC-related products.

A few years ago, JPMorgan dismissed Bitcoin as speculative. However, this product represents a marked change in the attitude of the firm towards the leading digital asset. Still, the company emphasized that the note does not involve interest payments and is not covered by the federal deposit programs.  

Growing Institutional Investment in Structured Crypto Notes

Other institutions like JPMorgan are also offering the same product. A recent example is the one offered by Morgan Stanley, which raised above $100 million in sales.

Rising demand shows investors’ interest in volatility-based strategies without having direct crypto ownership. Structured notes are regaining popularity following the period low issuance due to the global financial crisis.  

This new type of investment highlights a larger trend. Instruments tied to Bitcoin are growing even during market fluctuations. This is proof that traditional finance is still seeking and embracing new methods to serve its clients who desire crypto gains. They want that exposure without using personal wallets or crypto exchanges.

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