JP Morgan Chase: From being short on Bitcoin to joining hands with BlackRock

Both Invesco and BlackRock have designated JPMorgan as an authorized participant in their Bitcoin ETFs.

Written by Tyler Durden@Zerohedge

Compiled by: Qin Jin Carbon Chain Value

Remember when Jamie Dimon yelled that Bitcoin was a “fraud that will eventually explode” and that “if he were the government, he would shut down Bitcoin” and that the only "real uses of cryptocurrencies are for crime, Drug trafficking, money laundering and tax avoidance”?

It turns out that the bank, which has already paid out $40 billion in fines, fines and legal damages, is a repeat criminal enterprise that has decided to double down on crime by its own definition…

Today we learned that not one, but two giant asset managers - Invesco and BlackRock, the world’s largest asset manager and the Fed’s own trading platform - have designated JPMorgan as their authorized participant, i.e. Intermediary companies, ETFs can first do this by converting Bitcoin into cash and vice versa.

In addition to JPMorgan Chase, BlackRock also appointed Jane Street Capital - the fund company where Sam Bankman-Fried learned all about high-frequency trading in the Bitcoin market, thus becoming The greatest cryptocurrency criminal of all time - as the broker responsible for channeling cash in and out after his spot Bitcoin ETF received approval from the U.S. Securities and Exchange Commission (SEC) in January.

JPMorgan will become an authorized participant in the BlackRock iShares Bitcoin Spot ETF and the Invesco Galaxy Bitcoin ETF, according to a revised prospectus filed with the U.S. Securities and Exchange Commission late Friday. As such, they will be responsible for handling the creation and redemption of ETF baskets of stocks, as well as cash transfers between fund managers.

Or, as we say…

In addition to BlackRock, Wall Street’s ETF giants such as Invesco, Franklin Templeton and Fidelity have also applied for spot Bitcoin ETFs, and Grayscale Investments has also applied to list them. Grayscale Bitcoin Trust Converts to ETF. All of these applications are expected to be approved in the coming weeks.

Incidentally, this is likely due to JPMorgan’s insistence that the SEC require Bitcoin ETFs to use a cash creation redemption model, rather than physical redemptions. According to Bloomberg reporter Eric Balchunas, the reason why the U.S. Securities and Exchange Commission prefers the cash model of Bitcoin ETF spot is that it hopes to minimize exposure to actual Bitcoin during the redemption and issuance process. number of intermediaries.

They don’t like brokers acting as intermediaries for exposure to Bitcoin, Balchunas noted. The ETF analyst said: Many people intend to create unregistered subsidiaries to replace actual brokers, but the SEC does not want that.

The SEC wants to “close the loop a little more,” Balchunas said, and he’s also heard regulators are worried about money laundering.

He said: If only BlackRock and Coinbase were handling actual Bitcoin, you would have more control over the Bitcoin you own. They just want a more closed system with fewer intermediaries exposed to actual Bitcoin.

Of course, if JPMorgan Chase (which has been fined $40 billion over the past 15 years) facilitates money laundering, then all is well.

While JPMorgan has been designated as the AP (broker) for two of the ETFs so far, Jane Street Capital appears to be the AP for almost all of them, which means that, over the next few years, Jane Street Capital will be doing Front-running all ETF orders, if Sam Bankman-Fried had stayed at Jane Street Capital, he would likely have become a trillionaire, and perfectly legal.

As for stupid farmers like the one below, who just a few weeks ago gleefully claimed that even bank CEOs were on her side in her stupid anti-crypto crusade…

The joke is on “Pocahontas”…

Carbon Chain Value Note: “Pocahontas” is an animated film produced and distributed by Walt Disney in 1995. Its first release date was June 16, 1995. The real name of Pocahontas (Pocahontas in the film) is Matoaka. Pocahontas is actually her nickname, which means playful and naughty.

According to Reuters, as of late Friday afternoon, BlackRock Asset Management, VanEck, Valkyrie Investments, Bitwise Investment Advisers, Invesco Ltd., Wells Fargo Fund Management, Fidelity, WisdomTree Investments and Ark Investments and 21Shares joint ventures have both submitted new documents to regulators detailing the arrangements they have made with market makers to ensure trading liquidity and efficiency.

People familiar with the filing process said issuers that complete the filing before the year-end filing revision deadline may launch the Ark/21Shares ETF before January 10, the date by which the U.S. Securities and Exchange Commission must approve or reject the Ark/21Shares ETF.

Given the confidential nature of the discussions, the SEC could notify issuers as soon as Tuesday or Wednesday that they have been cleared to launch products next week, the sources said.

Bitcoin prices have more than doubled this year to just under $42,000, in part on expectations that the U.S. Securities and Exchange Commission will soon approve a spot Bitcoin ETF.

If regulators choose to approve a spot Bitcoin ETF, they could notify issuers as early as next week.

Valkyrie also disclosed in the filing that it would impose a 0.80% management fee on the ETFs if the SEC approves the products early in the new year. Ark and 21Shares have previously revealed that they plan to charge the same fees for their ETFs.

The Fidelity Wise Origin Bitcoin Fund is expected to be the cheapest fund, with fees of just 0.39%.

Invesco announced plans to charge a 0.59% fee, but added in a filing that it would waive fees for six months on the first $5 billion in assets attracted by the new fund.

Currently, a total of 14 asset managers hope to eventually obtain approval for a spot Bitcoin ETF from the U.S. Securities and Exchange Commission (SEC). U.S. securities regulators have repeatedly rejected such offerings over the past decade, citing concerns about market manipulation and the inability of would-be issuers to protect investors. To date, the only approved cryptocurrency ETFs are tied to Bitcoin and Ethereum futures contracts traded on the Chicago Mercantile Exchange.

Grayscale Investments and Hashdex, both looking to convert existing products into spot Bitcoin ETFs, submitted their own updates earlier this month.

The SEC did not immediately respond to a request for comment.