JPMorgan Said to Weigh Offering CME Bitcoin Futures to Clients

(Bloomberg) -- JPMorgan Chase & Co. is weighing whether to help clients bet on the price of bitcoin via the CME Group Inc.’s proposed futures contracts, according to a person with knowledge of the situation.

The largest U.S. bank is gauging client demand and the potential risks of facilitating their trades, the person said, asking not to be identified talking about internal deliberations. Chicago-based CME Group has said it hopes to offer bitcoin futures by year-end.

Bitcoin’s eight-fold surge in value this year is forcing Wall Street banks to balance clients’ interest in speculating on the cryptocurrency with executives’ skepticism about its future. JPMorgan Chief Executive Officer Jamie Dimon has been one of bitcoin’s most prominent detractors, calling it a fraud and deriding buyers as “stupid,” but his finance chief, Marianne Lake, has struck a more measured tone. The firm is “open minded” to the potential uses for digital currencies so long as they are properly regulated, she said last month.

JPMorgan already allows clients some access to bitcoin through an exchange-traded note, which involves routing their orders to exchanges. Handling client trades of futures contracts is conceptually similar but could still pose some risks, according to the person.

The New York-based bank’s deliberations were reported earlier by the Wall Street Journal. Exchange operator Cboe Global Markets Inc. is competing with CME Group to introduce bitcoin futures.

To contact the reporter on this story: Hugh Son in New York at hson1@bloomberg.net.

To contact the editors responsible for this story: Michael J. Moore at mmoore55@bloomberg.net, David Scheer

©2017 Bloomberg L.P.