JPMorgan Said to Allow IBIT as Collateral, Boosting Crypto

JPMorgan Chase will begin accepting cryptocurrency investments, including BlackRock’s iShares Bitcoin Trust (IBIT), as collateral for some loans, according to a published report, further legitimizing the biggest cryptocurrency as a mainstream store of wealth.  

JPMorgan, the biggest U.S. bank, will permit trading and wealth-management clients to put up crypto-linked assets to back some loans, according to unnamed sources cited in a Bloomberg News story. In some cases, crypto will be treated evenly alongside stocks and other assets when evaluating a potential client’s creditworthiness, the story said.

Investors Embrace IBIT, Bitcoin 

Such a plan further solidifies mainstream acceptance for Bitcoin, the No. 1 cryptocurrency whose value is backed not by a physical asset but with computer code, scarcity and trust imbued by fans and users. It’s also somewhat of an about-face for JPMorgan, which has issued no crypto-supported ETFs and whose CEO, Jamie Dimon, has complained of crypto’s potential for fraud and once referred to it as a fad like a “pet rock.”

“JPM’s policy changes regarding Bitcoin are proof that there is so much corporate, sovereign, institutional and retail demand for this new asset class that Bitcoin is now mainstream,” said Ric Edelman, founder of the Digital Assets Council of Financial Professionals and member of the etf.com editorial advisory board.

Investors are fully embracing IBIT, the world’s biggest crypto ETF, which is among the fastest-growing funds, in terms of assets, that’s ever been launched. Launched in February 2024, it’s among the 25 largest U.S. ETFs, with its $70 billion in assets fueled by $11.2 billion of net inflows and 12% in market gains so far this year.  

IBIT Fund Flows—Source: Factset

Some market gains followed the election of President Donald Trump, whose campaign was financially and vocally supported by crypto enthusiasts. While Trump has fully embraced crypto, his launching of digital coins and Trump Media & Technology Group Corp.’s plan to issue a Bitcoin-linked ETF have raised ethical issues that may dull the glimmer of legitimacy Bitcoin has achieved.

“This certainly adds to the legitimacy of the asset,” Luke Nolan, senior research associate at London-based Coinshares, said in an email. “A Bitcoin ETF is now being treated much like any other equity/stock, which can be borrowed against. Its place in a 'normal' portfolio is strengthening, and this is an important step for it.”