Morgan Stanley to Offer Spot Bitcoin ETFs to Select Clients: CNBC Report

Morgan Stanley has reportedly announced that it will soon permit its financial advisors to offer bitcoin exchange-traded funds (ETFs) to eligible clients, marking a significant milestone among major Wall Street banks.

As CNBC reported a short time ago, beginning Wednesday (August 7), the firm’s 15,000 financial advisors will be able to present two spot Bitcoin ETFs to qualified clients, according to sources familiar with the matter. These ETFs include BlackRock’s iShares Bitcoin Trust and Fidelity’s Wise Origin Bitcoin Fund, CNBC disclosed.

This initiative by Morgan Stanley, a leading wealth management firm, highlights the increasing acceptance of Bitcoin in mainstream finance. On January 10, the U.S. Securities and Exchange Commission approved applications for 11 spot Bitcoin ETFs, introducing an investment option for Bitcoin that is more accessible, cost-effective, and easily tradable.

Despite facing challenges such as market sell-offs, the dramatic fall of crypto exchange FTX, and criticism from prominent financial leaders like JPMorgan Chase CEO Jamie Dimon and Berkshire Hathaway CEO Warren Buffett, Bitcoin has endured. Consequently, major wealth management firms on Wall Street have been cautious, initially prohibiting their advisors from promoting these new ETFs and only processing trades at clients’ specific requests. Goldman Sachs, JPMorgan, Bank of America, and Wells Fargo continue to follow this approach, according to spokespeople from these banks, CNBC reported.

Sources informed CNBC that Morgan Stanley’s decision is driven by client demand and the evolving digital assets market. However, the bank is proceeding cautiously, limiting spot Bitcoin ETF solicitations to clients with a minimum net worth of $1.5 million, a high risk tolerance, and an interest in speculative investments. These investments will apparently be restricted to taxable brokerage accounts, not retirement accounts.

To mitigate risks, Morgan Stanley will monitor clients’ crypto holdings to ensure they do not accumulate excessive exposure to this volatile asset class, CNBC’s sources indicated. Presently, the bank’s approved crypto investments for solicited purchases are the BlackRock and Fidelity Bitcoin ETFs, while private funds from Galaxy and FS NYDIG, introduced in 2021, were phased out earlier this year.

CNBC also learned that Morgan Stanley is observing the development of recently approved spot Ether ETFs and has not yet decided whether to offer access to those.