Morgan Stanley Allows Financial Advisors to Offer Bitcoin ETFs to Clients
On Friday, Morgan Stanley made a groundbreaking announcement, becoming the first major Wall Street bank to allow its financial advisors to offer Bitcoin ETFs to certain clients. Starting this Wednesday, the firm’s 15,000 financial advisors will have the ability to present shares of two prominent bitcoin exchange-traded funds to eligible clients: Blackrock’s iShares Bitcoin Trust and Fidelity’s Wise Origin Bitcoin Fund.
Milestone in Mainstream Finance
This move by Morgan Stanley signifies a significant step towards the wider acceptance of Bitcoin in mainstream finance. The approval of 11 spot Bitcoin ETF applications by the U.S. Securities and Exchange Commission in January last year has made trading Bitcoin, the largest cryptocurrency, more accessible and cost-effective.
“The move is in response to customer demand and our desire to keep pace with the evolving digital asset market,” CNBC reported, citing sources familiar with the bank’s policies.
Initially, major asset managers on Wall Street were hesitant to allow advisors to promote the new ETFs. Goldman Sachs, JPMorgan Chase, Bank of America, and Wells Fargo still adhere to this policy.
Client Eligibility and Risk Assessment
Morgan Stanley’s decision to offer Bitcoin ETFs was primarily driven by high customer demand. However, the bank maintains a cautious approach. Only clients with net assets totaling $1.5 million or more, a high risk tolerance, and an interest in speculative investments will be eligible to receive Bitcoin ETF recommendations. These investments are limited to taxable brokerage accounts and not applicable to retirement accounts.
The bank will actively monitor clients’ cryptocurrency holdings to ensure they are not excessively exposed to this volatile asset class. Currently, Morgan Stanley has approved only BlackRock and Fidelity’s Bitcoin ETFs as cryptocurrency investments.
Impressive Asset Growth
BlackRock’s IBIT has accumulated close to $18 billion in assets since its launch, while Fidelity’s FBTC has amassed $11 billion in assets. The total assets under management for U.S. Bitcoin ETFs have surpassed $49 billion.
Earlier this year, Morgan Stanley phased out Galaxy and FS NYDIG private equity issuances, beginning in 2021. The bank is also keeping an eye on the newly approved Ethereum ETF market and has yet to determine if it will offer access to this market.
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