Morgan Stanley is officially getting involved in cryptocurrencies, according to a CNBC report, as the soaring price of bitcoin garners the attention of its wealthy investors.
In another example of the rising interest, Morgan Stanley told its financial advisors that it is launching access to three funds that enable ownership of bitcoin.
According to an internal memo, wealthier clients with “an aggressive risk tolerance” and have at least $2 million in assets can invest up to 2.5% of their net wealth in bitcoin funds.
“Two of the funds on offer are 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,” CNBC has learned from unnamed sources.
The Morgan Stanley insider added that the investment bank’s move into the bitcoin market was inevitable, given the high demand from its investors who were already set to push money into the space.
Morgan Stanley has recently increased its cryptocurrency exposure manyfold. Counterpoint Global, its $150 billion investing arm, has invested $500 million in business intelligence company, MicroStrategy, which converted its entire cash balance to bitcoin.
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Wall Street Massively Increases Bitcoin Exposure
Although Morgan Stanley has added more momentum by moving to open up access to bitcoin funds, Wall Street banks’ interest in bitcoin has been already building up over the last few months.
BNY Mellon said last month it plans to provide its clients with ‘an integrated service’ for digital assets, which would cover classic cryptocurrencies and could be extended to stablecoins.
America’s oldest bank will soon hold, transfer and issue cryptocurrencies on behalf of its asset management clients, citing growing client demand, maturity of blockchain solutions and better regulatory clarity.
Goldman Sachs, in an effort not to be left behind, said it has reopened a trading desk to make markets in cryptocurrencies, marking a key development in bringing the asset class into the mainstream.
Having worked out security issues such as how it would custody the assets, the New York-based bank is using its own money to trade with clients in a variety of non-deliverable forwards linked to the price of Bitcoin.
Elsewhere, BlackRock, the world’s largest asset manager with almost $8 trillion in AUM, has authorized two of its funds to invest in bitcoin futures.