TradingKey – JPMorgan is set to allow customers to use cryptocurrency as collateral, marking a major milestone in enhancing crypto liquidity.
According to Bloomberg (June 4), Wall Street giant JPMorgan plans to let clients use Bitcoin and crypto spot ETF shares as collateral for loans, putting them on equal footing with traditional assets like real estate and vehicles.
Previously, crypto-backed loans were limited to borrowing other cryptocurrencies. Investors could use Bitcoin (BTC) or Ethereum(ETH) as collateral, but only to borrow stablecoins such as USDT or USDC—keeping transactions confined to the digital asset space.
Now, JPMorgan’s initiative breaks this barrier, allowing users to secure fiat currency loans (USD, EUR, etc.) using their crypto ETF holdings.
By placing Bitcoin ETFs on par with real estate and auto loans, this move:
- Increases crypto’s liquidity in traditional financial markets
- Strengthens institutional adoption of digital assets
- Signals mainstream recognition of Bitcoin’s long-term value