Morgan Stanley is the first major American bank to provide its wealth management clients access to bitcoin funds. The investment bank, a giant in wealth management with $4 trillion in client assets, told its financial advisors Wednesday in an internal memo that the bank is launching access to three funds that enable ownership of bitcoin, according to people with direct knowledge of the matter.
Morgan Stanley made the move, a significant step toward the acceptance of bitcoin as an asset class, after clients demanded exposure to the cryptocurrency, according to the people, who declined to be identified because they were discussing internal bank communications.
Bitcoin’s recent rally has put Wall Street firms under pressure to consider investing in the nascent asset class. However, for the time being, the bank is only allowing its wealthier clients access to the volatile asset: it is suitable for people with “an aggressive risk tolerance” who have at least $2 million in assets held by the firm.
To qualify for the new stakes, investment firms must have at least $5 million in their bank accounts. In either case, the accounts must be at least 6 months old.
Even for accredited US investors with brokerage accounts and sufficient assets to qualify, Morgan Stanley is limiting bitcoin investments to up to 2.5 percent of their total net worth, according to the people.
Two of the funds are from Galaxy Digital, a cryptocurrency firm founded by Mike Novogratz, and the third is a collaboration between asset manager FS Investments and bitcoin company NYDIG.
The Galaxy Bitcoin Fund LP and FS NYDIG Select Fund require a minimum investment of$25,000, while the Galaxy Institutional Bitcoin Fund LP requires a minimum investment of $5 million.
Clients will be able to make investments as soon as next month, according to the people, after the bank’s financial advisors complete training courses related to the new offerings.
The wealth management divisions of Goldman Sachs, JPMorgan Chase, and Bank of America do not currently allow their advisors to offer direct bitcoin investments.