Crypto News- Morgan Stanley Dives Into Crypto: Morgan Stanley, the renowned Wall Street banking giant, is currently in the process of conducting due diligence for the potential inclusion of spot Bitcoin ETF products on its esteemed brokerage platform. With its status as one of the largest US broker-dealer platforms, Morgan Stanley has been diligently assessing the feasibility and desirability of offering spot Bitcoin ETFs to its valued clients, particularly following the recent approval by the US Securities and Exchange Commission in January.
Morgan Stanley Dives Into Crypto: Spot Bitcoin ETFs Coming to Brokerage Platform
In a recent filing, Morgan Stanley’s Europe Opportunity Fund has made notable updates to its language, indicating a willingness to consider investments in spot Bitcoin ETFs. According to a form N-1A submitted on Tuesday, the fund may seek exposure to these ETFs, albeit with the prudent stipulation that such investments do not surpass 25% of the fund’s assets. Although the primary focus of the fund remains investing in European companies, it has previously demonstrated an interest in digital assets by holding shares of the Grayscale Bitcoin Trust (GBTC).
Eric Balchunas, a senior ETF analyst at Bloomberg, speculated that the fund’s inclusion of this disclosure language could serve as a precautionary measure, ensuring compliance in the event of potential Bitcoin ETF exposure.
Morgan Stanley boasts a formidable reputation in alternative investments and the private market sector, managing assets exceeding a staggering $150 billion. Notably, the bank was among the pioneering US financial institutions to grant affluent clients access to Bitcoin funds back in 2021. During its first-quarter earnings call in April 2021, Morgan Stanley confirmed providing wealth management clients with exposure to Bitcoin through select external crypto funds.
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Balchunas pointed out that the Morgan Stanley fund has experienced minimal inflows in recent years, despite maintaining satisfactory performance, albeit lagging behind the S&P 500. Consequently, he suggested that this strategic move might be aimed at stimulating growth. He elaborated, stating:
“Managing this fund must present challenges, particularly given the lack of high-growth names in Europe comparable to those in the US. Hence, this move could be an attempt to inject some momentum and gain a competitive edge.”
The Bloomberg strategist expressed skepticism regarding the extent of potential exposure, estimating it would likely not exceed 2% of the fund’s assets. He referenced the allocation of 1.1% to Bitcoin by the Appleseed mutual fund as a plausible benchmark.
Balchunas further underscored the rigorous regulations governing mutual funds under the 1940 act, emphasizing the necessity for thorough disclosures. This elucidates why mutual funds are often among the first to disclose any form of Bitcoin exposure.
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