JPMorgan Chase has designed a new debt instrument that provides investors direct exposure to a basket of crypto-focused companies, according to a new filing with the United States Securities and Exchange Commission, or SEC.
JPMorgan’s Cryptocurrency Exposure Basket (Mar 2021) is described as an “unequally weighted basket consisting of 11 Reference Stocks of U.S.-listed companies" that operate businesses directly and indirectly related to cryptocurrencies.
The instrument allocates 20% to MicroStrategy, the data analytics firm with 91,064 BTC on its balance sheet. It also provides direct exposure to Square (18%) and Riot Blockchain (15%), two companies with significant exposure to Bitcoin. Nvidia Corporation and PayPal Holdings each account for 15% of the basket.
Advanced Micro Devices, Taiwan Semiconductor Company, Intercontinental Exchange, CME Group, Overstock.com and Silvergate Capital are also included in the basket.
The prospectus states:
“The weights of the Reference Stocks were determined based in part on exposure to Bitcoin, correlation to Bitcoin and liquidity.”
JPMorgan says payouts are based on how the basket of companies performs. The minimum investment is $1,000 with a maturation date of May 2022.
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