JPMorgan to Accept BTC and ETH as Institutional Loan Collateral, Boosting Liquidity and TradFi–Crypto Integration
JPMorgan will allow accredited institutional and high-net-worth clients to pledge Bitcoin (BTC) and Ether (ETH) as loan collateral from late 2025. Using third-party custodians, the bank aims to mitigate direct custody risks and offer up to 50% loan-to-value (LTV) ratios. This move marks a shift from CEO Jamie Dimon’s earlier skepticism and follows growing regulatory clarity across the US, EU and Asia. JPMorgan’s wealth management arm now factors crypto into net-worth calculations and is finalizing valuation methods, stress tests and compliance protocols. Competitors such as Morgan Stanley, State Street, BNY Mellon and Fidelity have also expanded digital asset services, including ETF access and custody. Enabling BTC and ETH as institutional loan collateral will boost liquidity, let hedge funds and family offices access fiat without selling holdings, and accelerate TradFi–crypto integration. Analysts project Bitcoin could rally to $165,000 amid heightened institutional demand. By bridging traditional finance and DeFi, JPMorgan’s initiative may set a template for blockchain financing and enhance market stability for accredited investors.
Bullish
In the short term, allowing BTC and ETH as collateral at up to 50% LTV will reduce selling pressure and support liquidity, as institutions can borrow fiat without liquidating positions. Third-party custody and enhanced risk models mitigate security concerns, further boosting confidence. Over the long term, broader regulatory clarity and institutional adoption are likely to sustain demand, potentially tightening supply and driving prices higher. JPMorgan’s move may spur competitors to offer similar services, reinforcing market depth. Together, these factors point to a bullish impact on BTC and ETH prices.