Morgan Stanley becomes first major US bank to offer bitcoin

In an internal memo, Morgan Stanley told its financial advisors that the bank is launching access to three funds that enable ownership of bitcoin.

The investment bank with $4 trillion in client assets will become the first major US bank to include bitcoin in its clients offering. Sources state that the move was made after clients demanded exposure to the cryptocurrency. For now the bank will restrict access to bitcoin to those clients who have at least $2 million in assets held by the firm and it will limit bitcoin investments to as much as 2.5% of their total net worth.

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

The move constitutes a significant step for the acceptance of bitcoin as an asset class. Bitcoin’s surge in the past year has put Wall Street firms in the spotlight to consider getting involved in the nascent asset class. Morgan Stanley’s memo placed its decision in light of current developments:

“For speculative investment opportunities to rise to the level of an investable asset class that can play a role in diversified investment portfolios requires transformational progress on both the supply and demand sides. With cryptocurrency, we think that threshold is being reached. A firming regulatory framework, deepening liquidity, availability of products and growing investor interest—especially among institutional investors—have coalesced.”

Morgan Stanley clients will be able to start making investments as early as next month once the bank’s financial advisors pass the necessary trainings and compliance requirements are met.

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

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