KEY FACTS: JPMorgan Chase is reportedly planning to allow institutional clients to use Bitcoin (BTC) and Ether (ETH) as collateral for loans. This move could bridge the gap between traditional finance and cryptocurrencies, according to a Bloomberg report. The initiative, which may launch as early as 2026, would involve third-party custodians to securely hold the assets, addressing risks like hacks and volatility. This follows JPMorgan's growing crypto engagement, including its JPM Coin and investments in Bitcoin ETFs, despite CEO Jamie Dimon’s past skepticism. The program could unlock significant liquidity for clients like hedge funds and corporations, signaling a broader Wall Street embrace of digital assets amid rising ETF inflows and regulatory progress.
Source: JPMorgan
JPMorgan's Leap into Crypto: Bitcoin and Ether Set to Back Wall Street Loans
JPMorgan Chase is reportedly gearing up to let its high-profile clients borrow against their holdings of Bitcoin (BTC) and Ether (ETH). This development, first revealed by Bloomberg on Friday, signals a deepening embrace of digital assets by one of Wall Street's most venerable institutions, potentially unlocking new avenues for institutional investors to tap into liquidity without parting with their crypto treasures.
The news comes amid a flurry of activity in the crypto sector, where regulatory green lights and market maturation have slowly thawed the skepticism of big banks. JPMorgan's plan would allow global clients (hedge funds, corporations, and ultra-wealthy individuals) to pledge their BTC and ETH as collateral for loans, with the assets securely held by a third-party custodian to mitigate risks like hacks or volatility spikes. While details on interest rates, loan-to-value ratios, or exact rollout dates remain under wraps, sources close to the matter suggest this could roll out as early as next year, building on internal discussions that have been simmering since mid-2025.
To understand the significance of this potential pivot, it is worth rewinding the tape on JPMorgan's rocky romance with cryptocurrencies. Founded in 1799 as the brainchild of Aaron Burr and Alexander Hamilton, the bank has long been a pillar of conservative finance. Yet, under the stewardship of CEO Jamie Dimon, it has methodically dipped its toes into the digital waters, even as Dimon himself has lobbed rhetorical grenades at the sector.
Back in 2018, Dimon famously declared that he had "no interest" in Bitcoin, likening it to a speculative tulip mania. Fast-forward to 2022, and his barbs sharpened: He called cryptocurrencies "decentralized Ponzi schemes" during a Senate hearing, a quip that drew chuckles but also underscored the chasm between blockchain's promise and crypto's pitfalls. Dimon has been quick to caveat, however, praising the underlying technology of smart contracts and distributed ledgers as revolutionary tools for efficiency in payments and settlements.
Despite the CEO's personal shade, JPMorgan's actions tell a different story. The launch of JPM Coin in 2020 marked the bank's first foray into programmable money, enabling instant cross-border payments for institutional clients. By 2024, the bank had quietly amassed stakes in spot Bitcoin exchange-traded funds (ETFs), joining the likes of BlackRock and Fidelity in betting on BTC's long-term viability. And in July 2025, during the bank's earnings call, Dimon struck a more conciliatory tone on stablecoins, revealing plans to "play in that sandbox" to better grasp their mechanics.
This latest wrinkle, using BTC and ETH as loan collateral, feels like the natural next chapter. It started in July 2025, when reports surfaced of JPMorgan exploring crypto-backed lending. A Financial Times piece from that time pegged full implementation as potentially delayed until 2026, citing the need for robust risk models to handle crypto's infamous price swings. But with Bitcoin stabilizing above $60,000 and Ether riding high on Ethereum's upgrades, the timing feels ripe.
JPMorgan's proposed service is straightforward yet transformative. Imagine a client sitting on $10 million worth of Bitcoin but needing cash for a merger or real estate deal. Under traditional setups, they would have to sell the BTC, triggering capital gains taxes and exposing them to market timing risks. With this new option, they could instead borrow against it (say, up to 50% of its value) keeping the asset intact for potential appreciation.
The mechanics involve a third-party custodian, likely a regulated entity like Coinbase Custody or Fidelity Digital Assets, to store the crypto offline in "cold storage" wallets. This setup not only shields against cyber threats but also ensures compliance with evolving regulations, such as the U.S. SEC's guidelines on digital asset custody. Loans would presumably be denominated in fiat currencies like the U.S. dollar, with interest rates tied to benchmarks like SOFR (Secured Overnight Financing Rate) plus a crypto-risk premium.
For institutions, this is a game-changer. "It's about providing yield and liquidity without the friction of selling," noted crypto analyst Lyn Alden in a recent podcast. "Banks like JPMorgan are finally seeing crypto not as a speculative sideshow but as a legitimate asset class that demands sophisticated financial products." Alden's view aligns with broader market sentiment. Since the SEC approved the first spot Bitcoin ETF in January 2024, inflows have topped $20 billion, proving that when Wall Street builds bridges to crypto, capital follows.
The past 18 months have seen a cascade of milestones that have normalized digital assets in the halls of high finance. The ETF approvals weren't just a win for Bitcoin; they paved the way for Ether ETFs in mid-2024, which have since attracted over $5 billion in assets under management. Meanwhile, reports from firms like Galaxy Digital suggest a seismic shift: An estimated $800 billion has flowed from altcoins into "crypto treasuries"— BTC and ETH held as balance-sheet staples by corporations and funds — a trend some analysts believe could become permanent.
This institutional hunger is fueled by crypto's dual appeal of scarcity (Bitcoin's 21 million cap) and utility (Ethereum's smart contract ecosystem). But it is also tempered by scars from past winters, like the 2022 collapse of FTX and Luna. Regulators, too, are playing catch-up; the European Union's MiCA framework went live in June 2024, and U.S. lawmakers are mulling a stablecoin bill that could greenlight more bank-issued tokens.
Competitors are watching JPMorgan closely. Goldman Sachs rolled out Bitcoin-backed loans for select clients in 2023, while Citigroup has experimented with tokenized deposits.
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