US bank Morgan Stanley to launch three Bitcoin funds

Morgan Stanley to launch two Bitcoin-focused funds soon as demand for cryptocurrencies increases among institutional clients, outlet reported CNBC Thursday, citing two people familiar with the matter.

The bank has, so far, remained cautious about introducing crypto services or implementing tools to facilitate adoption and use of the asset class. However, the recent run of Bitcoin and an overall favorable environment for cryptocurrencies seems to have changed this.

Switch to Bitcoin

According to the report, Morgan Stanley told advisers in an internal memo that it would soon launch access to three funds that allow investors to gain exposure to Bitcoin. The move would be part of the bank’s $ 4 trillion wealth management business.

The bank said customers “demand” that such services be available, supported by the rise in assets from less than $ 5,000 last year to over $ 58,000 at the time of this writing. Investors accredited in the United States do not have many options for trading Bitcoin other than regulated exchanges like Coinbase and Gemini or through institutional funds like Grayscale.

Such services are still New in the minds of traditional investors or those looking to trust a traditional brand. And that’s where Morgan Stanley’s expertise and brand would come in.

Of the three funds on offer, two would come from Galaxy Digital, the crypto company founded by Mike Novogratz. Another would be a joint effort of asset manager FS Investments and Bitcoin firm NYDIG.

Of these, the Galaxy Bitcoin Fund LP and the FS NYDIG Select Fund have minimum investment criteria of $ 25,000, while the Galaxy Institutional Bitcoin Fund LP operates with minimum criteria of $ 5 million.

Not for everybody

The funds are expected to be available to clients as early as next month. Morgan Stanley advisers would undergo training in this regard to help investors understand the opportunities (and drawbacks) of investing in Bitcoin.

But don’t think that anyone can buy Bitcoin through Morgan Stanley just yet. According to the report, the bank would only consider people with “an aggressive risk tolerance” for the Bitcoin pitch – and they must have at least $ 2 million in assets held by the company. In addition, accounts must be at least 6 months old.

And even for legally recognized “accredited” investors in the United States who meet both investment and brokerage criteria, Morgan Stanley would limit all Bitcoin investments to just 2.5% of their net worth. Not exactly without permission finances if you had to ask.


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