Morgan Stanley is set to become the first large bank in the United States to offer its wealth management clients access to bitcoin funds.
The investment bank, which has over $4 trillion in client assets, has reportedly told financial advisors in an internal memo the bank is giving wealthy clients access to three funds that allow them to own bitcoin.
According to CNBC, the move is being made after Morgan Stanley’s clients demanded exposure to the flagship cryptocurrency, after its massive rally that started late last year and saw the price of bitcoin go from $11,000 in October to a $61,800 all-time high earlier this month.
The rally reportedly pressured Wall Street firms to consider getting involved in the nascent asset class. Morgan Stanley is, for now, allowing clients with “an aggressive risk tolerance” and over $2 million in assets held at the firm to gain exposure to crypto. Investment firms, on the other hand, will need at least $5 million at the bank to qualify. Before investing in the funds, the accounts have to be at least six months old.
Per CNBC, even accredited investors with Morgan Stanley will be limited to 2.5% of their total net worth in the cryptocurrency funds. Two of the funds being offered are from Mike Novogratz’ Galaxy Digital, with a third one being from asset manager FS Investments and NYDIG.
The Galaxy Bitcoin Fund and the FS NYDIG Select Fund, both being offered, have a minimum investment amount of $25,000, while the Galaxy Institutional Bitcoin Fund has a $5 million minimum.
The report suggests clients may start investing in the funds as early as next month, after Morgan Stanley’s financial advisors complete training courses tied to the funds. As CryptoGlobe reported Counterpoint Global, a $150 billion unit of Morgan Stanley Investment Management that has racked up wins in mutual-fund rankings, is exploring whether bitcoin would be a suitable option for its investors.
JPMorgan is issuing debt linked to cryptocurrency-focused companies. The debt instrument, called the J.P. Morgan Cryptocurrency Exposure Basket, is long on several companies with exposure to crypto-assets or associated with the industry. These include MicroStrategy, Square, Riot Blockchain, and chipmaker NVIDIA. In total, it has positions in 11 companies.