According to a CNBC report, Morgan Stanley is about to offer exposure to bitcoin funds to its high net worth clients. The bank has briefed its financial advisors that it will provide access to two Galaxy Digital funds run by Mike Novogratz and a third FS NYDIG Select Fund.
However, they will only be made available to clients with $2 million in assets and it will be limited to 2.5% of the person’s net worth, given the volatility.
The news is not a big surprise as Morgan Stanley invested in NYDIG’s recent $200 million fund raising.
Morgan Stanley already owns almost 11% of the stock in MicroStrategy, a software company with several billion in bitcoin holdings. Given the size of the holdings compared to MicroStrategy’s core business, the firm might be viewed as a surrogate for a bitcoin ETF.
Hedge funds and family offices have taken an interest in the sector for some time. The latest move comes as several Swiss private banks have offered direct exposure to cryptocurrencies to their clients, including BBVA Switzerland. Singapore’s DBS Bank launched DBS Digital Exchange, a cryptocurrency exchange and custody solution for accredited investors. And Standard Chartered and Northern Trust launched a cryptocurrency custody offering Zodia.
Insurer MassMutual also has exposure to bitcoin after investing more than $100 million facilitated by NYDIG. And three listed firms, MicroStrategy, Tesla and Square, have invested treasury funds in bitcoin. We spoke to executives in the treasury sector who did not believe this would be copied because of bitcoin’s volatility. That said, most treasurers might be more conservative than CFOs, who could potentially override a treasurer’s advice.