Morgan Stanley on Friday told his troops Financial Advisor that it will soon be allowed to offer a bitcoin ETF to some clients, a first among major Wall Street banks to do so, CNBC reported.
The firm’s roughly 15,000 financial advisers will be able to solicit qualified clients to buy shares of two exchange-listed bitcoin funds starting Wednesday, according to people familiar with the policy.
Those funds are of BlackRock iShares Bitcoin Trust And Loyalty Wise Origin Bitcoin Fundpeople say
The move from Morgan Stanley, one of the biggest asset management firms, is the latest sign that bitcoin is gaining mainstream financial acceptance. In January, the U.S. Securities and Exchange Commission approved applications for 11 spot bitcoin ETFs, signaling the creation of a bitcoin investment vehicle that is more accessible, cheaper to own, and easier to trade.
Bitcoin has weathered the market sell-off, the spectacular collapse of cryptocurrency exchange FTX and criticism from the most prestigious figures in the financial sector including JPMorgan Chase CEO Jamie Dimon and Berkshire Hathaway CEO Warren Buffett.
So it’s no surprise that the big Wall Street asset management firms didn’t immediately embrace the new ETFs, barring their financial advisors from recommending them and only allowing trading if clients proactively seek out the products.
Goldman SachsJP Morgan, Bank of America And Wells Fargo remain in compliance with that policy, according to spokesmen for the four banks.
‘Aggressive’ tolerance
Morgan Stanley made the move in response to client demand and to try to keep up with the growing digital asset market, said the people, who declined to be named discussing the bank’s internal policies.
Still, the bank struck a note of caution in its rollout: Only clients with a net worth of at least $1.5 million, a high risk tolerance, and a desire to make speculative investments would be eligible to offer the bitcoin ETF, the people said. They added that the investments were for taxable brokerage accounts, not retirement accounts.
According to sources, the bank will monitor the amount of cryptocurrency held by its clients to ensure they are not overexposed to the volatile asset class.
The only crypto investments approved for purchase at Morgan Stanley are a pair of bitcoin ETFs and private funds from Galaxy and FS NYDIG that bank provided starting in 2021.
Morgan Stanley is watching the market newly approved Ether ETFs are in development but have not yet committed to whether they will provide access to those ETFs, the people said.
