The Great Collateral Migration: How JPMorgan’s Bitcoin Pivot Signals the Bifurcation of the $145 Trillion Fixed Income Universe
On November 24, 2025, America’s largest bank filed documents with the Securities and Exchange Commission that may have quietly marked the beginning of the end for fiat-denominated collateral supremacy. The implications extend far beyond cryptocurrency markets—they reach into the fundamental architecture of global finance itself. By Shanaka Anslem Perera.
JP Morgan has filed preliminary prospectus with the SEC for a Bitcoin-ETF-backed security that is comparable with some of the Bitcoin financial instruments offered by Strategy. It offers 1.5x leveraged upside with a 70% barrier that provides 30% downside protection.
This is happening at a time when MSTR is down over 60%, and (coincidentally?) Morgan Stanley Capital International (MSCI) opened a formal consultation on whether to exclude “digital asset treasury companies” from its equity indices.
It will be a serious blow to Strategy if they are excluded from this index, and it could catalyze other indexes to do the same, triggering a $9 billion loss in capitalization from passive index funds, which JP Morgan will be positioned to absorb with its new offering.
Perera continues:
Step back from the tactical maneuvering and a larger pattern emerges. … JPMorgan’s willingness to accept Bitcoin as loan collateral represents recognition of this significance within traditional financial infrastructure. The structured notes represent the first step toward embedding Bitcoin exposure into the standard product offerings available to institutional and high-net-worth clients.The question is not whether some fraction of the $145 trillion fixed income market will migrate toward thermodynamically secured collateral. The question is how large that fraction will be and over what time horizon the migration will occur.Conservative estimates suggest 1-5% of global fixed income demand could shift toward Bitcoin-denominated or Bitcoin-backed instruments over the coming decade—representing $1.45 trillion to $7.25 trillion in potential capital flows. … For the first time in the history of modern finance, a major Wall Street institution is building infrastructure to deliver thermodynamically scarce collateral to its institutional client base. The same institution is simultaneously developing competitive products that threaten the only publicly traded company to have successfully scaled Bitcoin treasury operations.