A view of the Morgan Stanley offices in Canary Wharf, London, UK
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CNBC has Morgan Stanley the first major US bank to offer its wealth management clients access to bitcoin funds.
The investment bank, a giant in wealth management with $ 4 billion in customer assets, said in an internal memorandum to its financial advisers on Wednesday that the bank is launching access to three funds that enable bitcoin ownership, according to people with direct knowledge of the matter. .
The move, an important step towards accepting bitcoin as an asset class, was taken by Morgan Stanley after customers demanded exposure to the cryptocurrency, said the people, who refused to be identified, shared information about the bank’s internal communication. The Bitcoin rally over the past year has put Wall Street businesses under pressure to consider getting involved in the emerging asset class.
But at least for now, the bank only gives its richer customers access to the volatile asset: the bank considers it suitable for people with an ‘aggressive risk tolerance’ who own at least $ 2 million in assets.
Some restrictions
Investment firms need at least $ 5 million at the bank to qualify for the new interests. In both cases, the accounts must be at least six months old.
And even for the accredited U.S. investors with brokerage accounts and enough assets to qualify, Morgan Stanley limits bitcoin investments to as much as 2.5% of their total net worth, the people said.
Two of the funds offered are from Galaxy Digital, the crypto firm founded by Mike Novogratz, while the third is a joint venture of asset manager FS Investments and bitcoin company NYDIG.
The Galaxy Bitcoin Fund LP and FS NYDIG Select Fund have a minimum investment 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 as early as next month after the bank’s financial advisers completed training courses related to the new offer, the people said.
Goldman Sachs, JPMorgan Chase and Bank of America’s wealth management divisions do not allow their advisers to offer bitcoin investments.
Earlier this month, JPMorgan filed documents related to a new debt investment related to a basket of crypto-related stocks such as MicroStrategy, the software industry that keeps bitcoin on its balance sheet. However, the investment has yet to be approved by the regulators.