The largest bank in the United States is singing a new tune about Bitcoin. JPMorgan Chase is now offering banking services to cryptocurrency exchanges Coinbase and Gemini in a pivotal and critical turn for Bitcoin and digital assets as an emerging mainstream form of money.
The Wall Street Journal reports that JPMorgan Chase will allow Coinbase and Gemini customers based in the US to make ACH (automated clearing house) withdrawals and transfers, marking the end of the bank’s anti-crypto era led by CEO Jamie Dimon, the industry’s most outspoken crypto critic.
Dimon called Bitcoin “a fraud” in September of 2017. The chief executive went a step further when he threatened to fire any “stupid” employees caught trading the cryptocurrency.
That position has melted in the wake of the macro economic landscape that is awash in money printing, instability, mounting debt, shrinking GDP and a tumultuous stock market that has left investors looking for a hedge.
According to WSJ, which cited unnamed sources, Coinbase and Gemini accounts were approved by JPMorgan Chase in April. This is the first time that the banking giant has onboarded a crypto business as a client. The banking relationship will allow the exchanges’ crypto customers to complete withdrawals, wire transfers and deposits to and from Coinbase and Gemini, establishing a critical bridge for the digital asset ecosystem.
Although Bitcoin is censorship-resistant and is not controlled by governments, central banks or central authorities, the network needs participation from major financial institutions in order to reach mass adoption. Without bridges in place that allow customers to link their bank accounts to a cryptocurrency exchange, enabling smooth and rapid transfers, the reach of digital assets could remain limited in scope.
Both Coinbase and Gemini have focused on developing strong regulatory frameworks that ultimately allowed them to pass a strict vetting process on the road to approval by the banking giant.
The JPMorgan Chase turning point, at least at the outset, lessens the argument that Bitcoin will effectively be stamped out by choking off crucial access points: primarily traditional banks that allow dollars to be converted into BTC and other cryptocurrencies. As more dollars flow into the cryptosphere and as digital assets become more entrenched in the financial system, the more likely it is that Bitcoin and its cousin coins can survive and thrive.
JP Morgan’s entry into crypto services coincides with recent revelations about industry influencers and sophisticated traders holding Bitcoin. Hedge fund investor Paul Tudor Jones announced last week that he’s betting on BTC with an estimated 2% allocation of his fund’s portfolio into Bitcoin futures. CNBC’s Joe Kernen has also confirmed his Bitcoin holdings following his gradual transition from crypto skeptic to crypto investor.
While traditional investors continue moving into alternative assets, Bitcoin completed its halving on Monday at block 630,000, the third such deflationary event in its 11-year history designed to slow the production of new BTC. Crypto investors are now gearing up for the 4th epoch.
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