Morgan Stanley (MS) to Offer Bitcoin ETFs to Wealthy Clients

Morgan Stanley MS is preparing to offer bitcoin exchange-traded funds (ETFs) through its advisors to meet the demand for the product from wealthy clients, according to a CNBC report. The offering will launch this Wednesday.

Morgan Stanley is allowing more than 15,000 of its financial advisers to trade shares of BlackRock Inc.’s BLK IBIT and Fidelity’s FBTC, according to people familiar with the matter. Clients must have a net worth of at least $1.5 million.

The approval of a spot bitcoin ETF by the Securities Exchange Commission (SEC) in January led to expectations that the newly approved investment vehicles would draw deep pockets of financial institutions into the cryptocurrency. However, leading firms like MS typically have to go through lengthier compliance and review procedures before approving funds for offering to their clients.

Morgan Stanley is a leading player in the alternative investment and private markets space, with more than $1.5 trillion in assets under management as of June 30, 2024. In 2021, it was the first major U.S. bank to offer its wealthy clients access to Bitcoin funds.

This move coincides with the company’s focus on the Asset Management (WM) segment, with less reliance on capital market revenue sources. The company’s strategic expansion efforts, including the acquisitions of Eaton Vance, E*Trade Financial, and Shareworks, are steps in this direction. Additionally, the WM segment’s total client assets witnessed a five-year (2018-2023) CAGR of 17.4%.

Although the challenging operating environment may lead to volatility in the metric in the near term, the trend is expected to continue to improve as the operating environment becomes more favorable.

Morgan Stanley shares have gained 12 percent in the past year.

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MS currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

In April, Coindesk reported that The Goldman Sachs Group, Inc. GS was added as an authorized participant (“AP”) for the spot bitcoin ETF launched by Grayscale and BLK.

Goldman, which served as AP for the Spot Bitcoin ETF, was tasked with the responsibility of tracking the ETF stock price along with the fund’s underlying holdings.

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