Morgan Stanley Becomes First Major Wall Street Bank to Offer Bitcoin ETFs
Morgan Stanley has set a new precedent by allowing its financial advisors to offer Bitcoin exchange-traded funds to clients, making it the first major Wall Street bank to do so. As of August 7, 2024, the bank’s more than 15,000 financial advisors can now market Bitcoin ETFs to eligible Morgan Stanley clients.
According to a CNBC report, Morgan Stanley has taken this bold step to meet the increasing demand for Bitcoin investment opportunities among its clients. The bank has given its advisors the green light to promote two specific funds – BlackRock’s iShares Bitcoin Trust (IBIT) and Fidelity’s Wise Origin Bitcoin Fund (FBTC) to interested clients.
However, not all clients will be eligible to invest in these Bitcoin ETFs. Only individuals with a net worth of $1.5 million or more, and who demonstrate an aggressive risk tolerance, will be allowed to invest speculatively in these funds. Additionally, the bank has specified that these ETFs can only be held in taxable brokerage accounts, not retirement accounts.
The Spot Bitcoin ETF Market
IBIT and FBTC are part of the 11 spot exchange-traded funds approved for trading by the U.S. Securities and Exchange Commission in January 2024. These ETFs, like others in the market, offer a convenient way for investors to gain exposure to Bitcoin through an easily accessible and tradable structure.
As of August 2, 2024, the U.S. Spot Bitcoin ETF has accumulated $57.2 billion in net assets, with cumulative net inflows reaching $17.5 billion. However, there have also been net outflows, with spot Bitcoin ETFs experiencing over $237 million in outflows, including significant withdrawals from Fidelity’s IBIT and Grayscale’s GBTC.
On the positive side, BlackRock’s IBIT saw inflows of $42.8 million, while the Grayscale Bitcoin Mini Trust (BTC) recorded inflows of over $9.8 million after listing on the New York Stock Exchange Arca.
