It is no secret that Jamie Dimon, the CEO of Chase — the largest U.S. bank, is not a fan of cryptocurrencies. At the 2017 Delivering Alpha conference, Dimon called cryptocurrencies a fraud. “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.”
More recently he testified before the U.S. House Financial Services Committee. When asked about his opinion about cryptocurrencies, he said: “My own personal advice to people is: stay away from it.”
So, it was somewhat surprising when Chase announced it would be the first major U.S. bank to offer all wealth-management clients the option to trade bitcoin and other cryptocurrencies.
“That does not mean the clients don’t want it. This goes back to how you have to run a business. I don’t smoke marijuana but if you make it nationally legal, I’m not going to stop our people from banking it,” explained Dimon when asked about the company’s decision to move into crypto.
Until now, JPM only offered an actively managed bitcoin fund provided by crypto firm NYDIG. Wealth-management account clients can now buy and sell five crypto products, Grayscale’s Bitcoin Trust, Bitcoin Cash Trust, Ethereum Trust, Ethereum Classic products, and Osprey Funds’ Bitcoin Trust.
The new policy allows all JPMorgan clients, including self-directed clients using Chase’s trading app, affluent clients of JPMorgan Advisors, and the richest tier of clients served by the private bank. Advisors cannot recommend crypto products to clients, and the clients must ask to make crypto trades. Clients that have regular Chase accounts, such as Chase Total Checking or Secure Banking, will need to open additional accounts to qualify.
How to invest in bitcoin
Investing in cryptocurrencies has gone mainstream. However, it is not an option at many traditional online brokers. If you are interested in trading in cryptocurrencies and don’t have a JPMorgan account, you can either open one or use one of the brokerages below. Note that fees vary, so it’s important to do your homework.
Many investors have reported being lured to websites that look like opportunities for investing in or mining cryptocurrencies but are bogus, according to the FTC. So, having major banks that enable trading in cryptocurrencies is good news for investors who wanted to add cryptocurrencies to their portfolios but were concerned about scams and preferred to use trusted investment advisors.
If you’re considering cryptocurrencies for your portfolio you may be wondering how to go about it. Some investment advisors suggest dollar-cost averaging to reduce the risk of volatility. There are also some new tax implications to consider (it can get expensive). So, be sure to talk to an accountant about how trading will affect your taxes.
What is dollar-cost averaging?
Dollar-cost averaging (DCA), also known as constant dollar plan, is an investment strategy where investors divide the total amount they invest over a period of time in order to reduce the impact of volatility on their investment. Instead of trying to time the market, you buy at regular intervals without taking into consideration price.
Finally, consider your personality as an investor and your tolerance to risk when deciding how much to invest. If you’re losing sleep over your investment when prices plummet, maybe bitcoin is not the asset for you. On the other hand, if you are dealing with a serious case of “fear-of-missing-out” when you see the prices soar, maybe buying a little will give you peace of mind.
Andrew is the Content Director for SuperMoney, a Certified Financial Planner®, and a Certified Personal Finance Counselor. He loves to geek out on financial data and translate it into actionable insights everyone can understand. His work is often cited by major publications and institutions, such as Forbes, U.S. News, Fox Business, SFGate, Realtor, Deloitte, and Business Insider.