JPMorgan's leveraged bonds trigger a wave of resistance! MicroStrategy supporters accuse of "manipulating" the market.

MicroStrategy (MSTR) supporters criticized JPMorgan's proposed Bitcoin-linked notes, accusing the bank of spreading fear, uncertainty, and doubt about MicroStrategy and other Crypto Assets financial companies. JPMorgan's notes are a leveraged investment product linked to Bitcoin prices, tracking Bitcoin prices but amplifying returns, allowing holders to gain 1.5 times the return (or loss) before December 2028.

JPMorgan launches 1.5x leveraged Bitcoin bonds

(Source: JPMorgan Chase)

JPMorgan's notes are a leveraged investment product linked to the price of Bitcoin. This product tracks the price of Bitcoin but amplifies returns, allowing holders to achieve 1.5 times the return (or loss) before December 2028. According to documents submitted to the U.S. Securities and Exchange Commission, the notes are set to be issued in December 2025. This product design is in direct competition with MicroStrategy's business model.

MicroStrategy's core strategy is to raise funds by issuing bonds and stocks to purchase Bitcoin, providing investors with leveraged exposure to Bitcoin prices. JPMorgan's 1.5x leveraged notes are essentially a more standardized and lower-leverage Bitcoin investment tool. For investors who do not want to bear MicroStrategy's high volatility, JPMorgan's products may be more attractive.

This move has drawn strong criticism from the Bitcoin community, with many stating that JPMorgan is now directly becoming a competitor to Bitcoin fund management companies and has the motivation to marginalize firms like MicroStrategy to promote its own structured financial products. “Saylor has opened the door to a $300 trillion bond market and a $145 trillion fixed income market. Now, JPMorgan is launching Bitcoin-backed bonds to compete with it,” a Bitcoin enthusiast stated on the X forum, adding, “Those institutions attacking MSTR are following this strategy.”

The logic chain of this accusation is as follows: On one hand, JPMorgan questions the sustainability of MicroStrategy's business model through research reports, spreading negative sentiments about the company; on the other hand, it launches directly competing Bitcoin leverage products, attempting to capture the market share created by MicroStrategy. This practice of “singing the blues about competitors while launching competing products” is viewed by the Bitcoin community as an unethical business competition tactic.

Bitcoin advocates accuse JPMorgan of triggering sell-off pressure

Bitcoin advocate Simon Dixon also pointed out that the upcoming products from JPMorgan are designed to “trigger additional margin requirements for Bitcoin collateralized loans,” claiming that this will “force Bitcoin treasury companies to apply selling pressure during market downturns.” This accusation reveals deeper concerns about manipulation.

MicroStrategy and other Bitcoin financial companies typically use Bitcoin as collateral to obtain loans or issue bonds. When the price of Bitcoin falls, the value of the collateral decreases, which may trigger margin calls, forcing companies to replenish collateral or partially sell Bitcoin. If JPMorgan's leveraged product design can amplify Bitcoin price fluctuations or influence market sentiment through large-scale trading, it could indeed indirectly create liquidity pressure on companies like MicroStrategy.

Although this accusation lacks direct evidence, it has a certain degree of logical validity. As one of the largest investment banks in the world, JPMorgan's product design and market operation capabilities far exceed those of ordinary institutions. If the bank truly intends to suppress Bitcoin financial companies by amplifying market fluctuations through leveraged products and influencing investor sentiment with negative research reports, it is technically not impossible. However, this accusation requires more empirical support to be established.

On the X server, cryptocurrency enthusiasts and MicroStrategy supporters are now calling for a boycott of JPMorgan, encouraging other Bitcoin holders to close their accounts with the financial services giant and sell any shares they may hold in the company. This grassroots boycott movement, while limited in influence, demonstrates the Bitcoin community's vigilance and resistance to traditional financial institutions entering this space.

Three Major Accusations from the Bitcoin Community Against JPMorgan

Malicious Competition: On one hand, releasing negative research reports to suppress MicroStrategy, while on the other hand, launching competing products to seize market share.

Market Manipulation: Amplifying volatility through leveraged products, triggering margin calls for Bitcoin financial companies.

Double Standards: Criticized Bitcoin and MicroStrategy in the past, now launching Bitcoin products to make money.

MSCI rule change proposal sparks greater conflict

The strong opposition from JPMorgan began with MSCI (formerly Morgan Stanley Capital International), which manages stock indices and sets the criteria for index inclusion. The company proposed to change its policy to exclude financial companies from its products. This proposed adjustment will take effect in January, prohibiting cryptocurrency financial companies with 50% or more of their assets in Crypto Assets from being included in the index.

JPMorgan shared the proposed policy change in a research report in November, which sparked strong criticism from the Bitcoin community and MicroStrategy investors. Excluding Crypto Assets treasury companies from stock indices would deprive them of passive capital flows and could force these companies to sell their encryption holdings to qualify for inclusion in the index, thereby further depressing asset prices.

The impact of this rule change is far-reaching. MicroStrategy currently has a market value of hundreds of billions of dollars, and if included in major indices such as the S&P 500 or MSCI, it will automatically gain billions of dollars in passive buying from index funds and ETFs. This passive capital flow can not only support the stock price but also reduce financing costs, providing more favorable conditions for the company to continue purchasing Bitcoin. Conversely, if explicitly excluded from the indices, MicroStrategy would lose this important source of capital, and the stock price could face structural pressure.

Even more suspicious is the coincidence of timing. JPMorgan almost simultaneously launched a Bitcoin leveraged product to compete with MicroStrategy, while promoting a research report that could potentially exclude MicroStrategy from the MSCI rule change. This dual approach has led the Bitcoin community to believe that this is a planned suppression action. If the MSCI rules take effect and MicroStrategy is excluded, investors may turn to JPMorgan's leveraged notes as an alternative, which is exactly what critics are concerned about as “manipulative play.”

The Duality of Traditional Financial Giants Entering the Bitcoin Market

JPMorgan's entry into the Bitcoin market is inherently dual-natured. From a positive perspective, the launch of Bitcoin products by the world's largest investment bank represents traditional finance's recognition of Bitcoin, which may attract more conservative institutional investors into the market. From a negative perspective, the entry of traditional financial giants may alter the market power structure, with the market originally dominated by Bitcoin native companies potentially being re-controlled by Wall Street giants.

The concerns of the Bitcoin community are not entirely unfounded. Historically, when traditional financial institutions enter emerging markets, they often leverage their capital advantages, regulatory influence, and market manipulation capabilities to reshape the rules of the game, making them favorable to themselves and unfavorable to the early pioneers. If JPMorgan really succeeds in promoting changes to the MSCI rules and replaces MicroStrategy with its own products, it will be a classic case of “the latercomers surpassing the pioneers.”

However, some analysts believe that these accusations are overly conspiratorial. The launch of Bitcoin products by JPMorgan may simply be in response to market demand, rather than an intentional effort to suppress competitors. The changes in MSCI rules may also be based on technical considerations of index methodology, rather than targeting specific companies. In the absence of conclusive evidence, jumping to conclusions too early may be unfair.

Regardless of the truth, this controversy highlights the conflicts that Bitcoin inevitably faces when transitioning from a fringe asset to mainstream finance. As Wall Street giants begin to take Bitcoin seriously and launch competitive products, the existing market landscape will inevitably be disrupted, and the conflicts of interest and power struggles during this process will continue to be a focal point of industry attention.