Morgan Stanley becomes the first US bank to offer access to Bitcoin funds to their wealth management clients. This will enable clients to hold and access cryptocurrency in their accounts. The plan was announced in an internal memo on March 17.
According to an exclusive report from Consumer News and Business Channel (CNBC), the decision was influenced by the increasing demands of clients to have access to cryptocurrencies. Bitcoin’s rally in the market for the past year pressured Wall Street firms to consider Bitcoin as an investable asset class.
Three funds will be offered by the investments bank. Two of those are operated by Galaxy Digital, a cryptocurrency firm founded by Mike Novogratz. The third fund is a joint effort from the Bitcoin company New York Digital Investment Group (NYDIG) and asset management company Franklin Square ‘FS’ Investment.
NYDIG CEO Robby Gutmann hinted at this offer on his podcast published on March 15. ‘In the next week, you’ll see a game-changing milestone for bitcoin adoption in the financial landscape’.
After the news broke on social media on March 17, Galaxy Digital founder Mike Novogratz immediately tweeted, ‘Galaxy is thrilled to partner with Morgan Stanley, the first US bank to offer wealthy clients access to Bitcoin funds’.
The decision made by Morgan Stanley is a significant step for the acceptance of cryptocurrencies, especially Bitcoin as an asset class. In terms of client assets, the wealth management giant records more than US$4 trillion.
However, not all clients are viable for this service. Morgan Stanley considers Bitcoin as a volatile asset that is suitable for clients with ‘an aggressive risk tolerance.’ Therefore, the bank is limiting access to wealthy clients with at least US$2 million in assets.
To qualify for new stakes, investment firms are required to have at least US$5 million at the bank. Additionally, the accounts should be at least 6 months old before the clients are able to access Bitcoin funds.
Furthermore, Morgan Stanley set a limit to Bitcoin investments by up to 2.5% of the client’s total net worth regardless if the investor holds brokerage accounts and enough assets in the bank.
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