Morgan Stanley Will Offer Wealthy Clients Access to Bitcoin Funds

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Morgan Stanley will be the first U.S. bank to offer bitcoin to its wealthier clients, according to CNBC, amid an increased institutional interest in Bitcoin and the crypto’s meteoric ascent of late.

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The investment bank told its financial advisors Wednesday in an internal memo that it is launching access next month to three funds that enable ownership of Bitcoin, according to people with direct knowledge of the matter, CNBC reports.

Morgan Stanley said in the note that, “For speculative investment opportunities to rise to the level of an investable asset class that can play a role in diversified investment portfolios requires transformational progress on both the supply and demand sides. With cryptocurrency, we think that threshold is being reached. A firming regulatory framework, deepening liquidity, availability of products and growing investor interest — especially among institutional investors — have coalesced,” according to The Block.

The funds Morgan Stanley will offer include two from Galaxy Digital, a crypto firm founded by Mike Novogratz, while the third is a joint effort from asset manager FS Investments and Bitcoin company NYDIG, according to CNBC.

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“Galaxy is thrilled to partner with Morgan Stanley, the first US bank to offer Wealth Management clients access to bitcoin funds,” Novogratz tweeted yesterday.

Meanwhile, NYDIG tweeted, “NYDIG is proud to partner with Morgan Stanley, the first US bank to offer access to #Bitcoin for their wealth management clients.”

The Galaxy Bitcoin Fund LP and FS NYDIG Select Fund have minimum investments of $25,000, while the Galaxy Institutional Bitcoin Fund LP has a $5 million minimum, according to CNBC.

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Only wealthy clients — those with at least $2 million in assets with the firm — will be able to access the funds. Morgan Stanley said that the investments are most suitable for people with “an aggressive risk tolerance,” CNBC reports

The bank will limit investments to 2.5% of total net worth even for investors with enough assets to qualify, according to the report.

“#Bitcoin continues to go mainstream. Slowly, then suddenly. Many understand this,” Tyler Winklevoss tweeted after the report.

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Find: Goldman Sachs to Restart Cryptocurrency Trading Desk as Bitcoin Rally Continues

Earlier this month, Goldman Sachs said it was restarting its cryptocurrency trading desk amid increased institutional interest in Bitcoin and the crypto’s meteoric ascent of late.

The bank will begin dealing Bitcoin futures and non-deliverable forwards for clients beginning next week, Reuters reported, citing a person familiar with the matter and adding that the team will sit within the bank’s global markets division.

Bitcoin broke the $60,000 ceiling for the first time last Saturday.

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About the Author

Yaël Bizouati-Kennedy is a former full-time financial journalist and has written for several publications, including Dow Jones, The Financial Times Group, Bloomberg and Business Insider. She also worked as a vice president/senior content writer for major NYC-based financial companies, including New York Life and MSCI. Yaël is now freelancing and most recently, she co-authored  the book “Blockchain for Medical Research: Accelerating Trust in Healthcare,” with Dr. Sean Manion. (CRC Press, April 2020) She holds two master’s degrees, including one in Journalism from New York University and one in Russian Studies from Université Toulouse-Jean Jaurès, France.

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