Morgan Stanley Bitcoin on Friday told its army of financial advisors that it will soon allow them to offer bitcoin ETFs to some clients, a first for major Wall Street banks, CNBC has learned.
The firm's roughly 15,000 financial advisers can ask eligible clients to buy shares of two publicly traded bitcoin funds starting Wednesday, according to people with knowledge of the policy.
These funds are From BlackRock iShares Bitcoin Trust and The Fidelity Wise Origin Bitcoin Fund, the people said.
The move by Morgan Stanley, one of the world’s largest wealth management firms, is the latest sign of bitcoin’s adoption by traditional finance. In January, the U.S. Securities and Exchange Commission approved applications for 11 spot bitcoin ETFs, heralding the arrival of a bitcoin investment vehicle that is easier to access, cheaper to own and easier to trade.
Bitcoin has weathered market sell-offs, the spectacular collapse of cryptocurrency exchange FTX and criticism from more established figures in finance, including JPMorgan Chase CEO Jamie Dimon and Berkshire Hathaway CEO Warren Buffett.
It is therefore not surprising that major Wall Street wealth management firms have not immediately embraced the new ETFs, banning their financial advisers from promoting them and only allowing transactions if clients were actively seeking the product.
Goldman SachsJP Morgan, Bank of America and Wells Fargo We are still pursuing that policy, according to spokespeople for the four banks.
'Aggressive' tolerance
Morgan Stanley made the decision in response to client demand and in an attempt to keep up with an evolving market for digital assets, said the people, who asked not to be identified discussing the bank's internal policies.
The bank remains cautious about the launch, however: Only clients with a net worth of at least $1.5 million, an aggressive risk tolerance and a desire to make speculative investments are eligible to apply for the bitcoin ETF, the people said. The investments are for taxable brokerage accounts, not retirement accounts, they added.
The bank will monitor clients' cryptocurrency holdings to ensure they do not end up with excessive exposure to the volatile asset class, the sources said.
The only cryptocurrency investments approved for purchase at Morgan Stanley are the bitcoin ETF pair and the Galaxy and FS NYDIG private funds that the bank made available starting in 2021.
Morgan Stanley is watching how the market for recently approved ether ETFs develops and has not committed to providing access to them, the people said.
