Investment bank Morgan Stanley will offer its wealthy clients access to Bitcoin funds. This makes it the first leading bank in the US to take such a step. Morgan Stanley currently manages over $4 trillion for its clients, and its move into bitcoin (BTC) could be huge for the crypto market.
Sources closely familiar with the matter told CNBC that Morgan Stanley told its financial advisors in an internal memo yesterday to grant access to three funds and allow clients bitcoin assets.
According to Morgan Stanley, the move to offer bitcoin funds results from increasing demand from its clients. The bitcoin rally over the past year has caught the attention of Wall Street. Several wealthy investors are demanding exposure to cryptocurrency.
There would be certain restrictions regarding bitcoin funds. Morgan Stanley would only allow wealthy clients to access the funds. To qualify, an investor must have at least $2 million in assets, while the minimum requirement for investment firms is at least $5 million. In both cases, accounts must be at least six months old.
Morgan Stanley will also limit bitcoin investments to about 2.5% of an investor’s total net worth, the sources added. This is to ensure that high-net-worth management clients are not exposed to the risks of bitcoin investment.
The investment bank will partner with Galaxy Digital, FS Investments, and bitcoin company NYDIG to offer the services. Galaxy Digital CEO Mike Novogratz was excited about this latest development and tweeted about it yesterday.
He said, “Galaxy is very excited to partner with Morgan Stanley, the first U.S. bank to offer wealth management clients access to bitcoin funds.”
Galaxy Digital will offer clients access to two funds, while FS Investments and NYDIG will partner to offer the third. The Galaxy Institutional Bitcoin Fund LP requires a minimum investment of $5 million. Simultaneously, the other two (the Galaxy Bitcoin Fund LP and the FS NYDIG Select Fund) have a minimum requirement of $25,000.
Morgan Stanley will allow clients to begin investing next month, he said, once financial advisors have completed training courses related to the new funds.