Key Takeaways

The new Bitcoin note ties returns to IBIT’s performance without giving direct bitcoin ownership.
Early gains are capped at 16%, but long-term upside can be boosted with 1.5× leverage.
Investors face real downside risk, including potential loss of principal if IBIT drops more than 40%.

Inside JPMorgan’s Bitcoin Note

JPMorgan has introduced a new structured note tied to BlackRock’s iShares Bitcoin Trust ETF (IBIT), the biggest bitcoin ETF in the U.S. This product gives investors the opportunity to gain interest based on how IBIT prices move in the future.

Although these Bitcoin notes are built on bitcoin exposure, they do not give investors any direct ownership of bitcoin. Instead, they offer a preset system of potential payouts based on how IBIT performs on specific dates.

JPMorgan’s IBIT-linked structured notes are a type of investment where your final payout depends on how the iShares Bitcoin Trust (IBIT) performs over time. They blend a bond with a derivative, so the return follows preset rules instead of simply rising or falling with the ETF.

According to the bank, each note is sold for $1,000. Here’s how it works:

When you buy the note (typically for $1,000), the bank records IBIT’s price that day. This becomes the Initial Value.

In the first outcome, if IBIT exceeds the initial price by the end of 2026, investors will get their money early and earn a guaranteed 16%. That is a total of $1,160. The investment is then closed, and no further payments will be made.

Example:

Note purchased for $1,000 in December 2025.
IBIT’s price is $100 on the day of the purchase (pricing day).
IBIT’s price is more than $100 one year later, in December 2026.
The note is automatically called (ended early).
You get your $1,000 back + a fixed 16% premium = $1,160.
Your investment ends right there.

This puts a cap on early gains. If by the end of 2026 the price of IBIT has doubled, or more, investors would still get a fixed 16% interest.

But if IBIT stays below the target in 2026 (less than $100 in our example), the note continues until 2028.

Example:

Note purchased for $1,000 in December 2025.
IBIT’s price is $100 on the day of the purchase (pricing day).
IBIT’s price is less than $100 one year later, in December 2026.
Note continues to maturity, in December 2028.

There are 3 possible outcomes for how payouts are calculated at the end of 2028.

In the first outcome, if by the end of 2028, the ETF’s price exceeds the initial price, investors earn 1.5 times the ETF’s gains with no limit.

Example:

Note purchased for $1,000 in December 2025.
IBIT’s price is $100 on the day of the purchase (pricing day).
IBIT’s price is $200 in December 2028. That is an increase of 100%
You will get your initial $1,000, plus 1.5 times the gains. That would be $1,000 + [$1,000 x (100% x 1.5)] = $2,500

The note includes limited protection. In the second outcome, if, by the end of 2028, the price of IBIT falls but is still more than 60% of its initial value, investors would still get their investment amount of $1,000.

Example:

Note purchased for $1,000 in December 2025.
IBIT’s price is $100 on the day of the purchase (pricing day).
IBIT’s price is between $60 and $99.99 in December 2028. That is a fall of less than 40%
You will get your initial $1,000. Your investment ends.

And in the third outcome, if the price falls more than 40%, investors will incur a loss on their investment.

Example:

Note purchased for $1,000 in December 2025.
IBIT’s price is $100 on the day of the purchase (pricing day).
IBIT’s price is $40 in December 2028. That is a fall of 60%.
You will take a loss matching IBIT’s loss. If IBIT is down 60%, yours will be too. You will get only $400.

Chart of returns for JPMorgan’s Structured Bitcoin note

JPMorgan is clear about the risks. The bank warns that the notes “do not guarantee any return of principal,” and under certain conditions, investors “could lose all of their principal amount at maturity.”

Structured notes like this appeal to investors who have an appetite for risk and want more gains than bitcoin usually offers. The fact that the note has some downside protection makes it even more attractive.

Bloomberg analysts described the note as offering a “Bitcoin-linked payoff” designed around expectations for Bitcoin’s next multi-year cycle.