Bitcoin News Today: Dimon's U-Turn: JPMorgan Now Backs Crypto Loans Amid Market Shift

JPMorgan Chase & Co. (JPM) is set to revolutionize its lending practices by allowing institutional clients to use Bitcoin (BTC-USD) and Ethereum (ETH-USD) as collateral for loans by year-end, according to a Seeking Alpha report. The program, which will leverage a third-party custodian to safeguard the pledged tokens, marks a significant step in the integration of cryptocurrencies into mainstream finance, according to a CryptoBriefing article. This move builds on JPMorgan's earlier acceptance of crypto-linked ETFs as collateral, such as BlackRock's iShares Bitcoin Trust.

The initiative underscores a broader trend of traditional financial institutions embracing digital assets amid regulatory easing and a surge in Bitcoin's price. With Bitcoin reaching an all-time high of $126,251 earlier this month and the Trump administration rolling back crypto restrictions, major banks are accelerating their forays into the space, according to a Bloomberg report. Morgan Stanley (MS), for instance, plans to offer retail clients access to major cryptocurrencies via its ETrade platform by mid-2026, while State Street, BNY Mellon, and Fidelity are expanding their crypto custody services.

JPMorgan's decision also reflects a symbolic shift for a bank long skeptical of crypto. CEO Jamie Dimon, who once dismissed Bitcoin as a "pet rock," has moderated his stance, stating in May that he "defends your right to buy Bitcoin" even if he personally remains cautious, according to The Business Times. The bank's pivot aligns with growing client demand for crypto-related services and evolving global regulations, including frameworks in the European Union, Singapore, and the United Arab Emirates.

The third-party custodian model addresses security concerns, as JPMorgan will not directly hold the crypto assets, as noted by CryptoBriefing. This approach mirrors practices in traditional finance, where assets like stocks and gold are often managed by third parties. The program's global rollout highlights JPMorgan's ambition to position itself at the forefront of crypto integration, despite lingering risks such as price volatility and regulatory uncertainty, the Business Times added.

Industry observers note that JPMorgan's move could catalyze further adoption, particularly as BlackRock and other firms gain the ability to convert investor-held Bitcoin into ETFs, analysts writing in Seeking Alpha say. However, challenges remain, including the need for robust risk management frameworks and the potential for regulatory shifts under future administrations, Bloomberg analysts warn.