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JP Morgan emerges as first bank to enter the metaverse with a virtual lounge

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JP Morgan, the largest US bank, has opened the Onyx lounge in Decentraland, making it the first lender in the metaverse. The virtual lounge is the bank’s first foray into the virtual world.

Oynx is the name of JP Morgan’s permissible Ethereum-based services. The virtual lounge bears the same name, and it allows institutions and businesses to access the metaverse.

The financial behemoth has released reports on cryptocurrencies’ general acceptance. The latest report from JP Morgan provides insight into the metaverse and integrated commerce applications opportunities. Electronics and fashion businesses have entered the world of digital real estate and metaverse parties, offering customers digital collectibles and experiences.

JP Morgan is exploring opportunities in the Metaverse

“There is a lot of client interest to learn more about the metaverse,” Christine Moy, JPMorgan’s head of crypto and the metaverse, stated in an email. “We put together our white paper to help clients cut through the noise and highlight what the current reality is, and what needs to be built next in technology, commercial infrastructure, privacy/identity, and workforce, in order to maximize the full potential of our lives in the metaverse.”

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They wrote in their metaverse report:

“One of the great possibilities of the metaverse is that it will massively expand access to the marketplace for consumers from emerging and frontier economies.”

JPMorgan starts its analysis of “metanomics” by noting that the average price of a virtual plot of land increased in the second half of 2021, rising from $6,000 in June to $12,000 in December across the four major Web 3 metaverse sites: Decentraland, The Sandbox, Somnium Space, and Cryptovoxels.

According to the JPMorgan analysis, “in time, the virtual real estate market might see services similar to those found in the actual world,” such as credit, mortgages, and rental agreements. It went on to say that decentralized finance (DeFi) collateral management might play a role and that this could be handled by decentralized autonomous organizations rather than traditional finance businesses (DAO).

The metaverse’s components continue to change at a breakneck pace. It’s challenging to build a corporate strategy around such a dynamic environment characterized by rapid development and new entrant innovation.

The costs and risks of engaging early and regularly to generate internal intellectual property, establish ideas about future business models, and discover ecosystem partners and collaborators, on the other hand, are pretty minimal. The asymmetrical risk of being left behind justifies the small initial expenditure required to get started and explore this new digital terrain.

Uniswap Founder’s Bank Account gets Shut Down by JPMorgan

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On Jan 23, Uniswap creator Hayden Adams tweeted that JPMorgan Chase had closed his bank accounts with “no notice or explanation.” Adams then went on to add that he is aware of “many individuals and companies who have been similarly targeted simply for working in the crypto industry” ending the post with the caption, ‘thanks for making it personal.’

Brian Quintenz, former Commodity Futures Trading Commission [CFTC] Commissioner who now works as a advisory partner on the a16z crypto team, chimed in to denounce the act terming it as ‘shadow de-banking of crypto‘ adding that “if the examiner told a bank that a certain customer is too risky and the bank ended that relationship, the bank is contractually prevented from telling that customer why.”

“Likely a shadow de-banking of crypto by @federalreserve or @USOCC [Office of the Comptroller of the Currency] bank examiners, with direction from the top.”

Quintenz in order to emphasize his point cited a Wall Street Journal article by staunch crypto supporter, senator Cynthia Lummis. In it, Lummis accused the Federal Reserve of deliberately delaying as it’s yet to determine whether Wyoming’s special purpose depository institution or SPDIs are banks or not.

In response to Hayden’s tweet, there were several replies confirming that they too were blocked by banks or had accounts closed for dealings with crypto. Interestingly, Chase support responded to the Uniswap founder’s tweet, acknowledging the ‘less than ideal experience’ he had and asked the Uniswap CEO to contact their messaging system.

Is the latest incident of Uniswap CEO ‘s account closure a shady tactics adopted by banks ?

Expressing surprise, Democratic Candidate for Congress, Matt West, stated that ‘this is part of why we need clear regulatory framework in the US re: crypto and banks.‘ Having said that CEO of JPMorgan Jamie Damon last year called Bitcoin as worthless.

It is not just banks in the US that are coming down hard on crypto investors. Last year, an Australian investor sued Westpac and the ANZ bank for closing his accounts resulting in the loss of funds at the time. Looks like banks now have the perfect weapon against crypto, as this shadowy action can be used to secretly remove customers without having to justify those actions.

JP Morgan CEO labels Bitcoin “worthless”; Clients strongly disagree

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A vast number of individuals across the globe have welcomed Bitcoin [BTC] with open arms, however, JP Morgan’s CEO Jamie Dimon remained untethered while the hype around crypto persists. Dimon was even seen outrightly dissing the king coin.

Despite being the first and the largest cryptocurrency, Bitcoin [BTC] took long and hard to reach its current stature. With criticisms from all across the globe, survival became rather difficult for the asset. However, the latest fervor around the coin got it out of its nascent stage in no time. While Bitcoin continues to thrive, major platforms were seen onboarding the coin. But, one platform continues to remain hostile towards BTC.

JP Morgan’s CEO Jamie Dimon appeared in a recent interview with Bloomberg and reveal that his resentment towards Bitcoin was persisting.

JP Morgan CEO still hostile towards BTC

Over the last couple of years, the JP Morgan CEO had continuously expressed his discontent with regard to Bitcoin. Dimon has called BTC an array of things, including, “terrible store of value,” “a fraud”, ” will be stopped,” and many more. Now, in his latest interview, Dimon went on to label the asset,” worthless.”

While all the altcoins were seen plummeting, BTC was the only asset that was thriving. The asset was undoubtedly aiming for $60K. At press time, BTC was trading for $57,310.

Despite the well-lauded growth of the king coin, Dimon went on to call it worthless. “I personally think that Bitcoin is worthless,” he added. He also suggested that he didn’t care and that it made no difference to him.

However, JP Morgan’s clients certainly think the same about the coin. Addressing the same, Dimon said,

“Our clients are adults, they disagree, that’s what makes markets, so if they want to have access to buy yourself Bitcoin, we can’t custody it but we can give them legitimate, as-clean-as-possible access.”

This made it clear that Dimon had no interest in BTC. While he does not refrain his clients from using it, Dimon could miss out on what the crypto market has to offer.

JPMorgan’s in-house Bitcoin fund launched; waiting for SEC approval

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Traditional banks have been the marker for cryptocurrency adoption and every positive step from their side has a direct impact on the whole of the digital assets world. JPMorgan, one of the world’s largest banks and a major player in the cryptocurrency space transformed their interest into genuine contribution with the launch of a native Bitcoin fund.

According to the reports, the private bank will give its clients an in-house option to enter the cryptocurrency market and learn the ropes. The fund will be offered in partnership with NYDIG, a major player in the Bitcoin ecosystem. Reports claimed that the fund has no direct investment from clients now but that situation could change in the coming weeks.

JPMorgan sources also added that the fund will be integrated easily into the system once regulatory approval is sanctioned. The Securities and Exchange Commission [SEC] is in charge of the check and once the green signal is given, JPMorgan clients can utilize the fund’s functionalities. Some have even called the fund one of the “safest and cheapest Bitcoin investment vehicles available on private markets”.

As of now, the bank still needs a sanction from the SEC for a Bitcoin ETF launch. US-based Grayscale was one of the few other companies with an ETF bid waiting to be sanctioned. All of JPMorgan’s Bitcoin exploits comes on the back of critical comments from its CEO, Jamie Dimon. Just earlier this year he had stated that he does not support Bitcoin and “does not really care about it”. He further commented:

“It’s worse than tulip bulbs. It won’t end well. Someone is going to get killed. It’s just not a real thing, eventually, it will be closed.”

JPMorgan analysts predict a solid future in staking as “Energy-Efficient” blockchains come to the forefront

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Mainstream financial institutions have raised concerns about the cryptocurrency market since its inception but the tide seems to be turning in 2021. Although JPMorgan Chase and its CEO Jamie Dimon have bashed digital assets before, it looks like some of the bank’s officials had other thoughts.

In a report this week, JPMorgan analysts claimed the creation of energy-efficient blockchains would pave the way for staking. They added that current blockchains suffer from the fact that they consume mammoth amounts of electricity and become contributors to global warming. JPMorgan’s latest report was contradictory to Dimon’s searing comments about the crypto market and its alleged lack of mainstream financial effectiveness.

One of the main discussions in the report revolved around staking and how it is a better alternative for customers to earn rewards for the investments. Right now, cryptocurrencies like Bitcoin and Ethereum use a Proof-of-Work-based foundation that requires gigawatts of power. Applying a Proof-of-Stake system not only reduces the energy consumed but also benefits users and their long-term gains. The report read:

“Not only does staking lower the opportunity cost of holding cryptocurrencies versus other asset classes, but in many cases, cryptocurrencies pay a significant nominal and real yield. The yield earned through staking can mitigate the opportunity cost of owning cryptocurrencies versus other investments in other asset classes such as US dollars, US Treasuries, or money market funds in which investments generate some positive nominal yield.”

With blockchains like Ethereum 2.0 on the horizon, the authors of the report stated that they would become a major source of income for cryptocurrency organizations. For example, Coinbase alone is expected to rake in $200 million in revenue from staking in 2022. To put this in perspective, the Brian Armstrong company only generated $10.2 million in 2020.

Users should know that staking is dependent on market volatility and does not create ROI the same way as traditional investments. Experts believe that staking will become a reliable source of income as the cryptocurrency market matures and its volatility decreases.

Goldman Sachs leads repo trade via JPMorgan’s blockchain network

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Goldman Sachs, the multinational investment bank and financial services company, has reportedly joined JP Morgan’s Repo blockchain network. As part of this, the company carried out its first repo trade using JPMorgan’s private blockchain network.

Goldman Sachs had led the initial trade on the 17th of June that involved exchanging a US Treasury bond for JPMCoin which took three hours and five minutes to complete. The entire transaction was quantifiable in nature since it could pinpoint the accurate amount of time required for completion. Hence, this was in contrast to the traditional repo market.

Following the development, Mathew McDermott, global head of digital assets for Goldman’s global markets division was quoted saying,

“We see this as a pivotal moment for the digitization of transactional activity.”

According to the exec, identifying the precise time is a big step up from the current market, as is the way the collateral and cash are interchanged simultaneously and immediately, the report said. McDermott also went on to add,

“We pay interest per the minute,” he said. “We firmly think this will change the nature of the intraday marketplace.”

The Repo blockchain was first unveiled in December sits within JP Morgan’s Onyx branch, which hosts multiple blockchain offerings. Goldman Sachs became the first to reveal that it was using the enterprise blockchain network, with BNY Mellon offering custody.

For the uninitiated, repurchase agreements, or better known as “repos,” are essentially a kind of loan where collateralized securities sold by financial establishments in a contract are bought back at a slightly higher cost some other time, usually on an overnight basis.

Goldman Sachs’ Tryst With crypto

Goldman Sachs was previously one of the many pessimists that doubted Bitcoin’s capabilities. However, since the foray of massive institutional capital into space, Goldman took a whole 180-degree turn on its previous stance.

The company had recently started trading Bitcoin futures after it partnered with Mike Novogratz-founded cryptocurrency merchant bank Galaxy Digital. A week back, Goldman Sachs had also revealed its plans to offer options and futures trading in Ether [ETH].

JPMorgan Files With SEC To Launch Debt Linked To 11 Cryptocurrency-focused Firms

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Wall Street investment banking company, JPMorgan Chase is set to roll-out debt instruments that are connected to 11 cryptocurrency-focused companies. In the latest development, the financial services behemoth has reportedly filed with the US Securities and Exchange Commission [SEC] about a new debt instrument to enable its investor clients to gain exposure to the cryptocurrency market in the form of public-company stocks involved with digital assets.

The latest stint happens to be JPMorgan’s first-ever material mention of Bitcoin. This comes as a surprise welcome as Jamie Dimon, the CEO of the bank has not been a fan of Bitcoin and had also called the crypto-asset a “fraud”.

The prosepectus read,

“The notes are designed for investors who seek exposure to the performance of the J.P. Morgan Cryptocurrency Exposure Basket (Mar 2021) of 11 unequally weighted Reference Stocks, which we refer to as the Basket, as reduced by the Basket Deduction of 1.50%. Notwithstanding the name of the Basket, the notes do not provide direct exposure to cryptocurrencies and the performance of the Basket may not be correlated with the price of any particular cryptocurrency, such as bitcoin.”

According to the documentation details on the official edict, JPMorgan’s Cryptocurrency Exposure Basket (Mar 2021) is described as an “unequally weighted basket consisting of 11 Reference Stocks of U.S.-listed companies” that operate businesses directly and indirectly related to cryptocurrencies

JPMorgan’s Crypto Exposure Basket Also Features MicroStrategy, PayPal among others

The upcoming debt instrument was a major development in the cryptocurrency space. Perfectly timed with the market-wide bullish reversal, JPMorgan’s news suggests that sentiment of the previously skeptic Wall Street biggies as cryptocurrency quietly appeared atop the chart surpassing stocks to bonds, oil, banks, gold, and tech stocks.

Also, it was the inclusion of some of the big names in the industry that was interesting. JPMorgan’s “basket” of companies include enterprise software and Bitcoin holder, MicroStrategy, payments companies including PayPal.

Other companies also include Jack Dorsey-led Square, Riot Blockchain, NVIDIA, AMD, semiconductor giant TSMC, Intercontinental Exchange, CME Group, Overstock and Silvergate. This “basket” is tasked with developing support for cryptocurrency into its app.

JPMorgan’s Bitcoin Flip Complete With a Bullish Report

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JPMorgan Chase, the largest bank in the United States and once the biggest critic of Bitcoin, now seems to have completely changed its mind. Besides, JPMorgan’s Bitcoin flip seems to be sitting well at the price of the world’s leading cryptocurrency. Bitcoin is on the rise again and has already added about $200 after dropping to $9,000 price level recently.

In the past, Jamie Dimon, CEO of JPMorgan Chase, labeled Bitcoin a fraud. Damon also described the obsession in BTC as a tulip bulb. However, it appears that the large financial institution is switching its stance towards the world’s top virtual asset by market capitalization.

 

JPMorgan Chase vs. Goldman Sachs

According to a new report published by JPMorgan Chase, the bank’s researchers describe Bitcoin as ‘mostly positive,’ stating that it has ‘longevity as an asset class.’ This is the complete opposite of what JPMorgan’s huge rivals, Goldman Sachs noted in their latest clients’ call for bitcoin and gold. According to Goldman Sachs, bitcoin is a poor investment, adding that BTC is not in any way, shape, or form an asset class.

The report by JPMorgan read:

“Though the [bitcoin] bubble collapsed as dramatically as it inflated, bitcoin has rarely traded below the cost of production, including the very disorderly conditions that prevailed in March.”

In March, the price of Bitcoin came tumbling down, resulting in the flagship cryptocurrency losing about 70 percent of its value. A month before the March crypto market crash, Bitcoin was trading well above the $10,000 mark. A few weeks later, the price dropped significantly to slightly hit the $3,000 price level, heartbreaking many investors across the world. Many traders and investors were wondering whether 2018 was being replicated all over again.

Nevertheless, this wasn’t the case this time around. Within thirty days, the top cryptocurrency had managed to recoup almost all it had lost with its price action; slightly reaching the $10,000 mark in both May and June. Those quick reflexes to regain a 70 percent loss amid an economy ravaging pandemic should not be downplayed.

What next after JPMorgan’s Bitcoin flip?

The latest report is another step towards a longstanding JPMorgan’s Bitcoin flip. In 2019, reports surfaced that the financial institution provides banking services to some of the largest cryptocurrency exchanges in the United States, such as Coinbase and Gemini. The report further states that:

“There is little evidence of run dynamics, or even material-quality tiering among cryptocurrencies, even during the throws of the crisis… [Bitcoin] price action points to their continued use more as a vehicle for speculation; than a medium of exchange or store of value.”

JP Morgan Crypto Credit Card Lawsuit Settled for $2.5 Million

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The 2018 JP Morgan crypto credit card lawsuit was recently settled by banking giants with $2.5 million in total payouts. The lawsuit filed two years ago claimed that JP Morgan Chase overcharged its customers for buying digital currencies using the bank’s credit card, categorizing purchases as cash advances.

JP Morgan Chase has opted to classify crypto purchases as “cash advances,” which are generally charged more than usual. As a result, some of the bank’s clients filed a class action suit back in 2018, which was settled back in March of this year. As part of the agreement, the banking giants will not admit any misdemeanor.

JP Morgan crypto credit card lawsuit was filed in 2018

However, according to a report by Reuters on May 28, the bank accepted to resolve the class action lawsuit by paying $2.5 million. According to one of the plaintiffs, Brady Tucker, JP Morgan breached the Truth in Lending Act; as it did not notify its clients that buying crypto using a credit card is being treated as “cash advances.” The report highlights:

“In a motion filed Tuesday in Manhattan federal court, plaintiffs said the settlement would result in class members getting about 95% of the fees they said they were unlawfully charged.”  

This classification resulted in customers being charged higher fees than usual. In his case, Tucker argues that JP Morgan declined to refund him for excessively charging him; after using his credit card to purchase digital currencies from Coinbase.

JP Morgan changes stance towards crypto

In reality, two years ago, when the lawsuit was filed, JP Morgan was unfriendly to digital currencies. The CEO of the bank, Jamie Dimon, also went on to label Bitcoin as a fraud. However, he later confessed to CNBC that he was mistaken to label Bitcoin as a fraud.

Nevertheless, it has recently been reported that JP Morgan offers banking services to two cryptocurrency exchanges, namely Coinbase and Gemini. This shows that the bank has changed its stance towards cryptocurrencies in recent times.

JP Morgan Goes bullish on Crypto as Coinbase and Gemini Create Accounts with The Bank

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Typically, the cryptocurrency industry has been viewed as an inferior sector compared to mainstream stalwarts. This feeling has caused a great deal of lag in the virtual asset environment, with banking institutions going through hard, at least until now.

Just recently, JP Morgan revealed that it was jumping into the digital asset stranglehold by offering banking services to crypto-bigwigs Coinbase and Gemini. According to official sources, the shift in sentiments of JP Morgan comes after the untapped potential of the decentralized market has been realized.

JP Morgan claimed that they will provide services such as deposits, withdrawals and transfers to both Coinbase and Gemini. Both facilities will be focused on the architecture of the Automated Clearing House [ACH], which is approved by most banking institutions. The latest move by the bank is set to prove beneficial to cryptocurrency companies as it solves one of the biggest concerns of the industry: lack of trust.

Banks have generally deferred from partnering with organizations in the virtual asset world due to rampant fears of money laundering. This has slowly dissipated with the passage of time as legitimate companies have gone through a number of regulatory hoops. JPMorgan was also interested in the sector earlier, with the bank pulling out of the planned stablecoin in 2019.

The latest venture of the bank allowed Gemini and Coinbase to become their first cryptocurrency clients. Sources close to JP Morgan added that the two exchange accounts were approved last month, with transactions already being processed. Speaking of the topic at the online portal, a major banker said:

“It’s quite significant news in my opinion. There is little business in fees associated with processing wire and ACH payments, I would expect that there are other associated benefits to JPM from any associated banking services, additional collaboration with both of those firms, potential for winning any future IPO or another angle such as JPM coin being offered on either of those platforms.”

Major bank on-board cryptocurrency companies can also act as a sign for other institutions to sit down and take note. Analysts said that if JPMorgan succeeds with Coinbase and Gemini, then it was only a matter of time before another suit followed. Some people in space found it ironic that a corporation whose CEO named Bitcoin ‘a scam’ earlier was going to make such a move.

JP Morgan CEO Jamie Dimon had previously claimed that fiat currency was the way to go, and that bitcoin was only a way for scammers to make money. Dimon stuck with his statements even though the bank was playing with the idea of a ‘JPM Coin.’ The CEO claimed that while Bitcoin was useless, its underlying blockchain technology had a huge potential.

Say what you’re going to do about growth, the cryptocurrency world will benefit greatly from the news circulation. The objective has always been to achieve credibility among the institutions, and the two exchanges would be happy to know that they were in the initial stages.