On Wednesday, the price of Bitcoin surged past $90,000, reflecting a significant rally driven by growing institutional demand and a new array of crypto products developed by Wall Street.

This impressive increase followed new disclosures indicating that BlackRock has expanded its exposure to its own spot Bitcoin ETF, while JPMorgan introduced a complex, high-stakes structured note directly related to BlackRock’s IBIT fund.

Bitcoin experienced 24-hour lows of $86,129 before rebounding above $90,300, continuing the volatile trend that has characterized the fourth quarter.

Recent regulatory filings from BlackRock reveal that the Strategic Income Opportunities Portfolio now holds 2,397,423 shares of IBIT, valued at $155.8 million as of September 30. This represents a 14% increase from June, when the fund reported 2,096,447 shares.

This consistent accumulation underscores how the world’s largest asset manager is strategically enhancing its exposure to Bitcoin-linked investments.

The heightened demand for structured crypto-linked investments among major banks coincides with JPMorgan’s launch of a newly proposed derivative-style note that enables institutional clients to speculate on the future price of Bitcoin through IBIT, the largest Bitcoin ETF, which currently holds nearly $70 billion in assets.

This product is both unusual and aggressive. The note establishes a price for IBIT for the following month. If, one year later, IBIT trades at or above that price, the note is automatically called, providing investors a fixed 16% return.

Conversely, if IBIT trades below the predetermined level in one year, investors remain in the product until 2028. Should IBIT exceed JPMorgan’s subsequent target price by then, investors could see returns of 1.5 times their investment, without any upper limit. In the event of a significant price increase in Bitcoin, returns will escalate accordingly.

Moreover, there is downside protection. If IBIT finishes 2028 at no more than 30% below its initial value, investors will receive their full principal back. However, if the ETF declines more than 30%, losses will parallel IBIT’s decline.

The structure combines a bond-like wrapper with derivative exposure, categorized broadly under FINRA’s “structured note” classification. These instruments meld traditional securities with options-based payouts tied to a reference asset—in this case, BlackRock’s Bitcoin ETF.

The argument presented to institutional investors is straightforward: predictable returns if Bitcoin’s price stagnates over the next year, leveraged upside potential extending through 2028, and limited long-term downside. The trade-off is equally transparent: no interest payments, no FDIC insurance, and the risk of substantial or complete loss of principal.

Reporting from The Block contributed to this article.

Bitcoin Price Volatility

JPMorgan has explicitly outlined the associated risks. Its prospectus cautions that investors “should be prepared to forfeit a significant portion or the entirety of their principal amount at maturity.” It further notes that Bitcoin’s volatility may be extreme, and these notes remain unsecured obligations of the bank.

This recent move also emphasizes a notable shift in Wall Street’s perspective on Bitcoin. CEO Jamie Dimon, who previously derided Bitcoin as “worse than tulip bulbs,” is now involved in the creation of products dependent on the long-term prospects of the digital asset.

Morgan Stanley is similarly exploring this domain; its own IBIT-linked structured note attracted $104 million last month. The bank’s two-year “dual directional autocallable” product offers enhanced returns if IBIT rises or remains stable, along with modest gains in the event of a 25% decline. However, once losses exceed that threshold, investors bear the full brunt of the loss without any protective cushion.

Industry analysts suggest these products signify a resurgence in the structured-notes market. Bloomberg reports that this sector is recovering from a decade-long downturn following the collapse of Lehman Brothers, which effectively erased billions connected to similar financial instruments.

The Bitcoin price has fallen over 30% from its all-time high in October, currently hovering around $87,000 amidst nearly two months of market uncertainty. Mid-tier whale wallets holding over 100 BTC are on the rise—indicating potential bargain hunting—while larger whale groups continue to liquidate their holdings, contributing to weakened spot demand.

Analysts caution that the critical support zone of $80,000–$83,000 is being tested repeatedly, with Citi indicating that the market lacks the necessary inflows to stabilize prices.

As of the time of writing, the price of Bitcoin stands at $90,049.

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