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A recent industry report shows that the fund-of-fund unit for the banking giants will help in onboarding crypto strategies for portfolio managers who actively trade in cryptocurrencies.
In a major development on Wednesday, July 14, banking giants JPMorgan Chase & Co (NYSE: JPM) and Swiss-based UBS Group AG (SWX: UBSG) have joined hands to back portfolio managers actively trading in digital assets. This is a big development showing Wall street’s growing interest in digital assets.
Major Step by UBS and JPMorgan
However, the two giants are currently carrying out their due diligence for crypto strategies, said people familiar with the matter. Media house The Street was the first to report this news. The publication also the onboarding of these crypto strategies will happen through the banks’ funds-of-funds unit.
These are basically pooled funds that invest in shares of other funds rather than directly investing into equities, bonds, and other assets. However, these funds reduce risk exposure while simultaneously attaining strong diversification.
JPMorgan and UBS are not the only players looking to join the crypto space. Two months back in May 2021, Well Fargo also showed interest. The bank said that its investment unit will work on building crypto strategies for high-ticket clients.
JPMorgan’s Support to Crypto
Back in April 2021, citing major demand from clients, the Wall Street bank said that it will soon float a Bitcoin Fund for its private wealth clients. It also noted that NYDIG – the Bitcoin-focused technology and financial services firm would serve as the crypto provider for the fund.
As the summer approaches closer we could possibly hear the big news anytime soon. Besides, the banking giant has also backed the idea of launching Bitcoin ETF in the United States. It noted that such a move will normalize the Bitcoin Futures market. Back then in April 2021, the banking giant said that there’s a huge institutional appetite for Bitcoin ETF. A Bitcoin ETF could trigger a huge influx of institutional money to the crypto market that would in turn help stabilize the spot trading.
Just like JPMorgan, UBS has also been working on offering crypto services to its rich clients. Back then in May 2021, UBS said:
“We are monitoring the developments in the field of digital assets closely. Importantly, we are most interested in the technology which underpins digital assets, namely the distributed ledger technology.”
The recent interest from the two banking giants is a testament that despite the market correction, institutional interest in crypto remains strong. We can expect more institutional inflows in the coming months.