JPMorgan Chase has initiated a new offering that allows retail investors access to leveraged Bitcoin exposure through structured notes, all while facing backlash for closing the personal bank accounts of crypto entrepreneur Jack Mallers, CEO of Strike. This development underscores the contrasting approaches the bank is taking toward institutional clients versus cryptocurrency industry leaders.
On one hand, JPMorgan is enhancing its product offerings by introducing structured notes linked to the performance of the iShares Bitcoin Trust (IBIT). This structured note provides investors with a leveraged exposure of 1.5 times the gains of IBIT, given they hold the investment until 2028. The note, priced at $1,000, features an early call option: if IBIT reaches a specified price by December 2026, a payout of at least $160 per note will be guaranteed, which reflects a minimum return of 16% over approximately one year. However, if the price target is not met, the note will continue to maturity, presenting an “uncapped” upside as long as Bitcoin appreciates.
Despite this upside potential, the product carries significant risks. A drop of around 40% from the initial level of IBIT could result in substantial losses, making it clear that this is not a principal-protected investment. The product is currently at the SEC filing stage, with details regarding distribution channels and volume still pending. Typically, such structured notes are accessible through broker-dealer and private banking channels, primarily targeted at advised or accredited clients rather than the general retail market.
In a noteworthy contrast, Jack Mallers has publicly stated that JPMorgan closed his personal accounts without providing an explanation, highlighting the disparity between the bank”s treatment of regular clients and industry figures. Mallers reported that his father has been a private client for over 30 years, yet when he inquired about the account closure, he received vague responses regarding “concerning activity” detected during standard monitoring.
This situation reflects a broader theme in the crypto space where institutionalization of Bitcoin products continues to evolve, while compliance teams impose strict controls on industry insiders. The bank referenced the Bank Secrecy Act in its communication regarding Mallers” account, emphasizing its commitment to regulatory compliance and the integrity of the financial system.
Furthermore, JPMorgan is also expanding its collateralized lending offerings, allowing institutional clients to use their Bitcoin and Ethereum holdings as collateral for loans. This program is set to be global and is expected to be launched by the end of the year, allowing for loans backed by direct holdings of BTC and ETH through third-party custodians.
While this move is aimed at institutional clients and wealth management, the specifics regarding the collateral acceptance and the full roster of eligible ETFs remain undisclosed. The bank”s strategy appears to be focused on catering to selected institutional and wealth clients while maintaining a cautious approach to crypto industry principals.
As regulatory scrutiny increases, JPMorgan is navigating the complex landscape of crypto banking. The recent executive order by President Trump aimed at preventing politicized debanking coincides with these developments, yet it does not alter the fundamental compliance obligations under the Bank Secrecy Act. The ongoing situation illustrates the delicate balance banks must strike between facilitating crypto investments for clients while managing risks associated with their relationship with the industry.
Ultimately, JPMorgan”s dual approach of offering innovative products to wealth clients while distancing itself from crypto executives like Mallers raises critical questions about the future of banking in the cryptocurrency sector.
