Morgan Stanley has announced that it will soon allow its 15,000 financial advisors to offer bitcoin exchange-traded funds (ETFs) to select clients, making it the first major Wall Street bank to take this step.
Starting August 7th, Morgan Stanley’s advisors will be able to solicit eligible clients to purchase shares of two prominent bitcoin ETFs: BlackRock’s iShares Bitcoin Trust and Fidelity’s Wise Origin Bitcoin Fund. This decision comes in response to growing client demand for exposure to the digital asset class and the evolving landscape of cryptocurrency investments.
However, Morgan Stanley is proceeding cautiously with this rollout. Only clients with a minimum net worth of $1.5 million, an aggressive risk tolerance, and an interest in speculative investments will be eligible for bitcoin ETF solicitation. Furthermore, these investments will be limited to taxable brokerage accounts and will not be available for retirement portfolios.
The bank will also monitor clients’ cryptocurrency holdings to ensure they do not become overly exposed to this volatile asset class. Currently, the only other crypto investments approved for purchase at Morgan Stanley are the two bitcoin ETFs and private funds from Galaxy and FS NYDIG, which the bank has offered since 2021.
This move by Morgan Stanley, one of the world’s largest wealth management firms, is seen as a significant milestone in the mainstream adoption of bitcoin. It follows the U.S. Securities and Exchange Commission’s approval of 11 spot bitcoin ETF applications in January, which has made it easier, cheaper, and more accessible for investors to gain exposure to the cryptocurrency.
Despite bitcoin’s resilience through market downturns, the collapse of crypto exchange FTX, and criticism from prominent figures in finance, major Wall Street wealth management firms have been cautious in embracing these new ETFs. Many have prohibited their advisors from promoting these products unless clients actively express interest[.
However, Morgan Stanley’s decision to actively pitch bitcoin ETFs to eligible clients is expected to drive increased adoption of these investment vehicles. Market experts view this move as a positive development for the crypto industry, particularly given the exceptional success of spot bitcoin ETFs in attracting over $17.7 billion in net inflows since their launch.
As the financial landscape continues to evolve, Morgan Stanley’s pioneering step in allowing its advisors to recommend bitcoin ETFs to qualified clients is likely to set a precedent for other major banks and wealth management firms to follow suit.
