Morgan Stanley First Bank To Offer Bitcoin-Based ETFs

Another step towards the institutional adoption of cryptocurrencies in mainstream finance has been taken: renowned bank and wealth manager Morgan Stanley has officially announced that its 15,000 financial advisors can offer Exchange Traded Funds (ETF) based on Bitcoin to selected clients.

Morgan Stanley's Choice and Future Scenarios

The bank is thus responding to a need that many investors now feel is their own, following the introduction of BlackRock's iShares Bitcoin Trust and Fidelity's Wise Origin Bitcoin Fund: that of betting on cryptocurrencies. Indeed, more and more savers active in the stock market want to trade such funds and Morgan Stanley wants to intercept these wishes.

It will now be interesting to see how the other big players in finance will respond, as a two-headed model is emerging: Goldman Sachs and JP Morgan remain cautious, as do other big names, while BlackRock, Fidelity and now Morgan Stanley have wasted no time in embracing Web3 and adding it to their financial proposition portfolio.

A New Era for Morgan Stanley

The green light was given on Wednesday 7 August. From that date onwards, the army of financial advisers at the largest US wealth manager began advising clients with appropriate risk profiles to invest in IBITs and FBTCs. These are iShares' Bitcoin Trust and Fidelity's Wise Origin Fund, the two most trusted Bitcoin-based ETF assets on Wall Street today.

The decision marks a clear overshooting. Morgan Stanley has decided to trust these stocks, overlooking the many doubts that still surround cryptocurrencies due to their endemic volatility. At this point, it can be expected that the wealth manager will soon add to its offering also the Ethereum-based spot ETFs, which are since recently available to Wall Street investors.

A Milestone

The green light received from Morgan Stanley is something of a milestone for the entire cryptocurrency industry. The big financial advisory firms, the ones that finance analysts call wirehouses to emphasise how they hold the wires (wires) of the exchange and decide on their own how to connect them together, have been hesitant to embrace Bitcoin-related ETFs first and Ether later. Many are still doing so. Yet a giant such as Morgan Stanley, the most relevant of these powers, has made a strong decision, and one that still runs counter to the actions of the aforementioned JP Morgan and Goldman Sachs as well as other powers such as Bank of America or Wells Fargo.

Let us not underestimate this development. Although the entry of these crypto-related spot ETFs into the stock market was greeted by a generally positive sentiment, in reality these assets have not gone beyond their catchment area and have struggled to find enthusiasm among more traditional investors. These, in fact, tend to be conservative and struggle to jump into new trading possibilities. Now that these products have been endorsed by such a major player, a lot could change.

Morgan Stanley as Opener

The current estimate is that some $60 billion will pour into cryptocurrency-based ETFs between now and the end of the year. Almost all of this liquidity will come from the portfolios of retail investors who are enthusiastic about blockchain technology and already own their own wallets, or from hedge funds that have been investing in the Web3 for some time.

Conquering a market segment such as wirehouses, which manage trillions of dollars, is a new beginning for the industry, a real game changer, as Kyle DaCruz, the director of digital assets at VanEck, a trading house that has been sponsoring cryptocurrency-related ETFs since the first launch in New York, called the news.

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