Morgan Stanley To Offer Bitcoin ETF To Qualified Clients: Report

Morgan Stanley has announced plans to offer Bitcoin ETFs to its selected clients based on certain criteria. This decision, reported by CNBC on Friday, marks a significant milestone as Morgan Stanley becomes the first among major Wall Street banks to take this step.

Morgan Stanley’s Bitcoin ETF Announcement

Morgan Stanley has made a groundbreaking announcement, becoming the first major Wall Street bank to allow its financial advisors to offer bitcoin ETFs to select clients. Starting Wednesday, the firm’s 15,000-strong team of financial advisors will have the ability to solicit eligible clients for the purchase of shares in two exchange-traded bitcoin funds, BlackRock’s iShares Bitcoin Trust and Fidelity’s Wise Origin Bitcoin Fund.

This decision follows the U.S. Securities and Exchange Commission’s approval of 11 spot bitcoin ETFs in January, marking a significant milestone in the mainstream adoption of cryptocurrency investments. Morgan Stanley’s move is a response to growing client demand and reflects the bank’s efforts to adapt to the evolving digital asset marketplace.

However, the bank is proceeding with caution. Strict eligibility criteria have been set for clients interested in these bitcoin ETFs. To qualify, clients must have a net worth of at least $1.5 million, demonstrate an aggressive risk tolerance, and express a desire to make speculative investments. Furthermore, these investments will only be available for taxable brokerage accounts, not retirement accounts.

Morgan Stanley’s approach sets it apart from other major banks such as Goldman Sachs, JPMorgan, Bank of America, and Wells Fargo, which currently maintain more restrictive policies on bitcoin ETFs. This move reflects the growing acceptance of bitcoin in mainstream finance, despite past market volatility and criticism from prominent figures in the financial world.

The bank plans to closely monitor clients’ crypto holdings to prevent excessive exposure to this volatile asset class. While Morgan Stanley is also observing developments in the newly approved ether ETF market, it has not yet committed to offering these products.

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Bitcoin ETF Performance

As developments continue to evolve as regards the Bitcoin ETFs, they have also managed to do good numbers in terms of inflows of recent. Data from FarsideUK indicates that spot Bitcoin ETFs recorded $50.6 million in inflows as of August 1. Grayscale’s new mini BTC ETF, boasting the lowest trading fees, recorded an impressive $191.1 million in inflows. BlackRock’s IBIT also saw positive movement with $25.9 million in inflows.

However, the market response has been mixed. Some ETFs experienced outflows, with Fidelity’s FBTC recording $48.4 million in outflows, Bitwise’s BITB $20.7 million, and Ark 21Shares’ ARKB $22.4 million. Grayscale’s GBTC witnessed $71.3 million in outflows, likely due to its high 1.5% fee.

It’s also noteworthy that Grayscale’s Ethereum ETF (ETHE) saw significant outflows of $78.8 million as of August 1, contributing to total outflows exceeding $2 billion. However, there are signs that this trend might be slowing, potentially indicating a shift in market sentiment.

Also Read: Coinbase CEO Hints At S&P 500 Style Crypto Index Fund Launch