Like different Wall Street banks, JPMorgan appears as an agent for buyers and sellers of Bitcoin XBT, an exchange-traded note created to track the value of the cryptocurrency.
JPMorgan does not take points in the machine with its own capital and routes the requests electronically to exchanges, JPMorgan spokesperson Brian Marchiony said.
“They are not JPMorgan orders,” Marchiony said. “These are customers purchasing third-party goods directly.”
JPMorgan’s involvement with Bitcoin XBT came into the issue over the weekend when the business blog Zerohedge asked why the group was involved with the selling after CEO Jamie Dimon called bitcoin a fraud and stated he would fire anyone at the group who trades it.
Bitcoin is a digital currency that allows individuals to give value to each other and pay for goods and services outside of the controlled financial system.
Because it is not supported by any government and has been tied to violations, including money laundering, hacking, and drug trafficking, most financial companies have stayed away from dealing in bitcoin.
Dimon took that view in his comments last week. “If we have a dealer that trades bitcoin, I would dismiss them in a second, for two reasons: It is opposite to our rules and they are stupid, and both are dangerous,” he said at an investor convention.
Even so, major financial firms including JPMorgan have spent in a technology called blockchain that underpins bitcoin purchases in hopes that it can be utilized for other purposes, such as settling ordinary trades.
Bitcoin prices fell last week to nearly $3,000 from $4,200 after Dimon spoke and China reportedly split down on cryptocurrency exchanges. But bitcoin bounced with the new week, trading on the Bitstamp exchange at $4,025 on Monday.
Along with JPMorgan, further than a dozen banks, including Morgan Stanley, Goldman Sachs Group Inc and Credit Suisse Group AG, have served as brokers for buying and selling Bitcoin XBT on Nasdaq’s Stockholm-based exchange, according to Swedish online bank Nordnet AB.
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