Morgan Stanley told his army on Friday financial advisors that it will soon allow them to offer bitcoin ETFs to some customers, a first among major Wall Street banks, CNBC has learned.
The company’s roughly 15,000 financial advisors can ask eligible clients to buy shares of two exchange-traded bitcoin funds starting Wednesday, according to people with knowledge of the policy.
Those are the funds BlackRocks iShares Bitcoin Trust and Trouw’s Wise Origin Bitcoin Fund, the people said.
The move of Morgan Stanley, one of the world’s top players largest asset managers are the latest sign of bitcoin’s adoption by the mainstream financial sector. In January, the U.S. Securities and Exchange Commission approved applications for 11 spot bitcoin ETFs, heralding the arrival of a bitcoin investment vehicle that is easier to access, cheaper to own and easier to trade.
Bitcoin has weathered market sell-offs, the spectacular collapse of crypto exchange FTX and criticism from the financial world’s most established figures, among others JPMorgan Chase CEO Jamie Dimon and Berkshire Hathaway Director Warren Buffett.
So it’s not surprising that Wall Street’s big asset management firms didn’t immediately embrace the new ETFs, banning their financial advisors from pitching them and only allowing trades if clients were actively seeking the product.
Goldman SachsJP Morgan, bank of America And Wells Fargo still follow that policy, according to spokespeople for the four banks.
‘Aggressive’ tolerance
Morgan Stanley made the move in response to customer demand and in an effort to track an evolving digital asset market, said the people, who declined to be identified talking about the bank’s internal policies.
However, the bank is still being cautious in its rollout: Only customers with a net worth of at least $1.5 million, an aggressive risk tolerance and a desire to make speculative investments are eligible for bitcoin ETF applications, the people said. The investments are for taxable brokerage accounts, not retirement accounts, she added.
The bank will monitor customers’ crypto holdings to ensure they are not overexposed to the volatile asset class, the sources said.
The only crypto investments approved for solicited purchase at Morgan Stanley are the pair of bitcoin ETFs from BlackRock and Fidelity; private funds from Galaxy and FS NYDIG that the bank made available from 2021 were phased out earlier this year.
Morgan Stanley is watching how the market for newly approved ether ETFs develops and has not commented on whether it would provide access to them, the people said.
Correction: Galaxy and FS NYDIG private funds that Morgan Stanley made available from 2021 were wound down earlier this year. An earlier version of this story contained inaccurate information from Morgan Stanley sources about the company’s crypto investment offering.