Thursday, October 21 2021

Morgan Stanley is the first major U.S. bank to offer its wealth management clients access to bitcoin funds, CNBC has exclusively learned.

The investment bank, a wealth management giant with $ 4 trillion in client assets, told its financial advisers in an internal memo on Wednesday that it was launching access to three funds enabling bitcoin ownership. , according to people with direct knowledge of the subject.

The move, a significant step towards accepting bitcoin as an asset class, was taken by Morgan Stanley after clients requested exposure to the cryptocurrency, the people said, who declined to say. be identified by sharing details of the bank’s internal communications. Bitcoin’s rally over the past year has put Wall Street companies under pressure to consider getting involved in the nascent asset class.

But, at least for now, the bank only allows access to the volatile asset to its richest customers: the bank considers it suitable for people with an “aggressive risk tolerance” who have at least $ 2 million in assets held by the company.

Some restrictions

Investment firms need at least $ 5 million in the bank to qualify for new holdings. In both cases, the accounts must be at least 6 months old.

And even for accredited U.S. investors with brokerage accounts and enough assets to qualify, Morgan Stanley limits bitcoin investments to 2.5% of their total net worth, people said.

Two of the funds on offer come from Galaxy Digital, a crypto firm founded by Mike Novogratz, while the third is a joint effort by asset manager FS Investments and bitcoin firm NYDIG.

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

Customers can likely make investments as early as next month, after the bank’s financial advisers take training courses related to the new offerings, people said.

Goldman Sachs, JPMorgan Chase, and Bank of America’s wealth management divisions currently do not allow their advisors to offer direct bitcoin investments.

Earlier this month, JPMorgan filed documents related to a new equity basket-linked debt investment with crypto exposure like MicroStrategy, the software company that holds bitcoin on its balance sheet, and the Square payment.


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