In an internal memo distributed Wednesday, the investment bank has disclosed its launch of three funds that would enable bitcoin ownership to individual clients.
This is great news for the crypto community at large: a major financial institution, in particular a banking institution, is now accepting bitcoin as an emerging asset class. The move from Morgan Stanley is an industry first and positions the firm on a tight spot as other major financial institutions are likely to follow suit.
The announcement is a timely and relevant indicator of how strong bitcoin has been going forward: the alpha cryptocurrency has just hit a new record high of $61,742 on March 13.
The firm is one of six U.S. banks who have expressed interest in bitcoin as an asset class and as a way of hedging against inflation. Notably, Goldman Sachs, JPMorgan Chase, and the Bank of America’s wealth management divisions currently prohibit their advisors from offering direct bitcoin investments.
However, according to details shared by CNBC through an exclusive report, the bank will only consider applications for the fund from its individual clients who have at least $2 million in assets held with the firm.
Morgan Stanley has also confirmed that the minimum qualifications for other investment firms to join in runs down to at least $5 million (USD) assets held with them, citing that the limitations were set in place because they can only consider providing access to people with “an aggressive risk tolerance” for the new stakes at hand.
The investment bank is an established brand name in wealth management and the financial industry, with roughly $4 trillion in client assets. For both investor categories, the accounts must have been open and verified for at least six months, prior to application.
For accredited U.S. investors with brokerage accounts and qualifying assets, Morgan Stanley puts out a strict limit on bitcoin investments at 2.5% of a client’s total net worth. Of the three funds on offer, two were identified. One is with Galaxy Digital, a crypto firm founded by Mike Novogratz, and the other is a collaboration between asset manager FS Investments and NYDIG, a tech and finance firm specializing in Bitcoin.
According to Morgan Stanly, minimum investments begin at $25,000 through the Galaxy Bitcoin Fund LP and FS NYDIG Select Fund, a baseline that’s set alongside the Galaxy Institutional Bitcoin Fund LP, which has a $5 million minimum investment amount. The investment rounds open next month, April.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.