Morgan Stanley chief says clients have little interest in bitcoin
Cryptocurrencies and the underlying blockchain technology have proven their longevity, but digital assets are not in high demand among Morgan Stanley's clients. The financial conglomerate's head James Gorman said this, CoinDesk reported.
"I don't think cryptocurrencies are a passing fad, I don't think they will disappear any time soon. I don't know how much bitcoin should or shouldn't be worth. But these things aren't going away, and the underlying blockchain technology is obviously very real and powerful," Gorman said during a Q3 2021 teleconference.
He said Morgan Stanley does not provide retail clients with direct access to digital assets, but allows them to invest in cryptocurrencies through various funds. The head of the conglomerate said that such activities "are not a big part of the business".
In March, CNBC sources reported on Morgan Stanley's plans to open up access to bitcoin funds to accredited investors with at least $2 million in capital. The bank has capped investments in the instruments at 2.5% of their equity capital.
In April, the conglomerate did not rule out adding derivatives on the first cryptocurrency to 12 of its own funds in a filing to the SEC.
In June, asset managers New York Digital Investment Group and FS Investments applied to the SEC to register a bitcoin fund targeting Morgan Stanley clients.
The financial conglomerate had previously disclosed a $1.3 million position in Grayscale Bitcoin Trust (GBTC). It subsequently increased its investment in the bitcoin trust through controlled entities like Morgan Stanley Insight Fund.
The latter bought $27.7 million worth of GBTC shares. Such investments can reach up to $25% of AUM, according to documents to the SEC.
Gorman's words contrast with a recent statement by JPMorgan chief executive Jamie Dimon, who said that "bitcoin is worthless". The holding company's CEO stressed that his clients believe otherwise, which is why the organisation provides them with the appropriate tools to invest.
Recall that Morgan Stanley began forming a team in September 2021 that will focus on studying the impact of cryptocurrencies on equities and fixed-income instruments.