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JPMorgan and UBS Plan to Onboard Active Cryptocurrency Strategies

Wed, 14/07/2021 - 15:15
JPMorgan and UBS Plan to Onboard Active Cryptocurrency Strategies
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According to a July 14 report by The Street, JPMorgan and UBS are currently carrying out their due diligence with regard to cryptocurrency hedge funds.

It would be yet another sign of Wall Street's deeper involvement in the cryptocurrency industry.

This development is not unexpected. In May, Wells Fargo announced that its investment unit would introduce an active strategy for its deep-pocketed cryptocurrency clients. Hence, it would be natural that other major banks of the likes of JPMorgan would follow suit.


Former U.S. Treasury Secretary Mnuchin Says Buying Bitcoin Is "Perfectly Fine"

The onboarding of crypto strategies will take place through the banks' fund-of-funds (FOF) units.

FOFs are pooled investment funds that primarily invest in the shares of other funds instead of equities, bonds or other assets.

The main advantage of such investment vehicles is the ability to achieve broad diversification without facing too much risk.

Ambivalent views

In April, there were media reports about JPMorgan launching a Bitcoin fund this summer due to client demand.

UBS, the biggest Swiss bank, started exploring ways to offer cryptocurrencies to its affluent clients this May.

However, the rumored move into crypto contradicts a recent note published by the bank's wealth management team that urged investors to steer clear of crypto due to an inevitable regulatory clampdown.

Regulators have demonstrated they can and will crack down on crypto...So we suggest investors stay clear, and build their portfolio around less risky assets.

Following a massive correction, Wall Street remains generally skeptical of crypto. Earlier today, BlackRock CEO Larry Fink told CNBC that there was "very little" demand for crypto among its clients.


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