Morgan Stanley is the first major US bank to offer its wealthy clients access to bitcoin funds


A view of the Morgan Stanley offices in Canary Wharf, London, UK.

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Morgan Stanley is the first major bank in the US to offer its wealth management clients access to bitcoin funds, CNBC has learned exclusively.

The investment bank, a wealth management giant with $ 4 trillion in client assets, told its financial advisers on Wednesday in an internal memo that the bank is launching access to three funds that enable bitcoin ownership, according to people with direct knowledge of the matter. .

The move, a significant step towards accepting bitcoin as an asset class, was made by Morgan Stanley after clients demanded exposure to the cryptocurrency, said the people, who declined to be identified sharing details about the internal communications of the cryptocurrency. Bank. Bitcoin’s rally in the last year has put Wall Street companies under pressure to consider getting involved in the nascent asset class.

But, for now at least, the bank only allows its wealthiest clients access to the volatile asset: the bank considers it suitable for people with “an aggressive tolerance for risk” who have at least $ 2 million in firm assets.

Some restrictions

Investment firms need at least $ 5 million in the bank to qualify for the new holdings. In any case, the accounts must be at least six months old.

And even for those accredited US investors with brokerage accounts and enough assets to qualify, Morgan Stanley is limiting bitcoin investments to 2.5% of their total net worth, the people said.

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

The Galaxy Bitcoin Fund LP and the FS NYDIG Select Fund have minimum investments of $ 25,000, while the Galaxy Institutional Bitcoin Fund LP has a minimum of $ 5 million.

Clients are likely to be able to make investments starting next month, after the bank’s financial advisers complete training courses related to the new offerings, the people said.

The wealth management divisions of Goldman Sachs, JPMorgan Chase and Bank of America currently do not allow their advisers to offer investments in bitcoin.

Earlier this month, JPMorgan filed documents related to a new debt investment tied to a basket of crypto-related stocks like MicroStrategy, the software company that keeps bitcoin on its balance sheet. However, that investment has yet to be approved by regulators.

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