At the beginning of the ongoing month, Morgan Stanley issued a statement that the bank was looking into options for offering Bitcoin and cryptocurrencies exposure to its clients. The Wall Street Bank was established by the grandson of J.P. Morgan, Henry Morgan, along with others in 1935. The firm is currently handling assets amounting to $4 trillion for its institutional and high net-worth clients. On March 14th 2021, the bank issued a report to make a case for BTC as an investable asset class.
The report states that Bitcoin and cryptocurrencies have monumental investment potential, and it is a possible distribution of capital investment for accredited clients. The wealth management unit also stated in the report that for now, the investors should focus mainly on publicly traded products, multi-assets, venture capital, and private equity options.
The Traditional Finance Giants are Ready to Put High Stakes in Bitcoin
Two years ago, most people were not bothered about Bitcoin or any other digital asset. However, after its current boom stage and impactful bull run, more and more financial institutes are jumping onto the Bitcoin bandwagon. Morgan Stanley is the forerunner in setting a precedent for BTC and other types of cryptocurrencies. According to a Thursday regulatory filing, more details about the twelve new BTC pegged funds have come to light.
The filing states that the wealth management clients would have exposure to twelve different funds, which would have stakes up to 25% in Bitcoin at any given time. The exposure would be indirectly facilitated by the cash-settled futures or Grayscale Bitcoin Trust (GBTC). The investment stakes of each fund in cryptocurrencies would be possible through a wholly-owned subsidiary. These subsidiaries would act like an exempted company under the Cayman Islands Laws.
Wall Street Campaigning for Bitcoin as a Burgeoning Asset Class
The Wall Street report authors Lisa Shalett and Denny Galindo have offered their cautious opinion for their wealth management clients to have stakes in Bitcoin. There had been reports and studies in the past where the firm found out a dominating favour of investors tilting in favour of digital asset exposure. The Wall Street analysts have dubbed cryptocurrencies as a speculative commodity that should be read into and researched before betting any stakes.
However, the authors of the report have also shown a willingness to explore the technological stepping stone and endorse its addition to building a diversified investment portfolio. The report further adds that factors like regulatory framework independence, liquidity liberty, opportunities for derivatives, and institutional investment traffic has all piece together to bring Bitcoin to a position of stability.