Morgan Stanley has become the first major US bank to offer high net worth individuals (HNIs) access to Bitcoin funds
Investment bank Morgan Stanley will offer its wealthy clients access to Bitcoin funds, making it the first leading bank in the United States to make such a move. Morgan Stanley currently manages over $4 trillion for its clients, and its entry into Bitcoin (BTC) could be huge for the crypto market.
Sources close to the matter revealed to CNBC that Morgan Stanley told its financial advisors yesterday via an internal memo that it is launching access to three funds, granting clients ownership of Bitcoin.
According to Morgan Stanley, the move to offer access to Bitcoin funds results from increasing demand from its clients. Bitcoin’s rally over the past year has caught Wall Street’s attention, and several wealthy investors are clamouring to gain exposure to the cryptocurrency.
There would be certain restrictions in place regarding the Bitcoin funds. Morgan Stanley would only grant wealthy clients access to the funds. To qualify, an investor needs to have at least $2 million in assets held by the firm, while the threshold requirement for investment firms will be a minimum of $5 million. In both cases, the accounts have to be at least six months old.
Morgan Stanley would also limit Bitcoin investments to roughly 2.5% of an investor’s total net worth, the sources added. This is to ensure that the wealthy management clients are not overexposed to the risks of Bitcoin investment.
Morgan Stanley partners with Galaxy Digital to offer the Bitcoin funds
The investment bank will be working with Galaxy Digital, FS Investments and Bitcoin company NYDIG to offer the services. Galaxy Digital CEO Mike Novogratz was delighted with this latest development and tweeted about it yesterday.
He said, “Galaxy is thrilled to partner with Morgan Stanley, the first US bank to offer Wealth Management clients access to Bitcoin funds”.
Galaxy Digital will offer its clients access to two funds, while FS Investments and NYDIG will partner to offer the third one. The Galaxy Institutional Bitcoin Fund LP requires a minimum investment of $5 million while the other two (the Galaxy Bitcoin Fund LP and FS NYDIG Select Fund) have a minimum requirement of $25,000.
Morgan Stanley would allow clients to start investing by next month as soon as its financial advisors’ complete training courses related to the new funds.