JPMorgan Chase is considering whether to allow its clients to trade CME’s new bitcoin futures product through its futures-brokerage unit, said a Wall Street Journal report on Tuesday November 21.
The source said JPMorgan was investigating whether there is demand among its customers for the proposed CME bitcoin contract.
The controversy and the interest
It means JPMorgan has not stopped looking at business opportunities in the planned Bitcoin futures market despite CEO Jamie Dimon’s criticism of the cryptocurrency. Dimon was reported on September “he would fire any bank’s traders who bought or sold Bitcoin”. In November, he called Bitcoin a “fraud” and a bubble “worse than tulip bulbs” and which would finally burst.
He added that the idea was valid and the bank is experimenting with uses of that code. But did not understand the value of “non-fiat” digital currencies.
Many other firms offer their customers access to the CME’s markets through their futures brokerage firms. They include Goldman Sachs Group Inc., Bank of America Merrill Lynch and Morgan Stanley. It is likely that JPMorgan will follow.
It was claimed in September that JPMorgan already collects commission for handling client trades of Bitcoin XBT, an ETN trading in Europe and tracking bitcoin. JPMorgan denied those claims saying it simply routes customers’ buy and sell orders electronically to exchanges.
CME launch & regulations
The CME Bitcoin futures and trading will be launched on December 10 according to their Tuesday announcement. The company was motivated by an increasing interest among the institutions. In the evolving cryptocurrency markets and would use to futures contract to help them access the markets.
CME said it had been working with regulators and was confident that the futures contract review would go through. The futures are regulated in the United States.
The futures contract will be cash-settled and based on the CME CF Bitcoin Reference Rate (BRR) launched by CME earlier November.
Announcements by CME about their futures contract have caused rise in prices, surpassing $6,500 for the first time last month, then going past $8,000 for the first time Sunday November 19 and then to $8,250 Tuesday November 21.
Growth of Bitcoin derivatives products could, according to Fundstrat’s Tom Lee, push the Bitcoin price to above $20,000 by 2022.