Based on a Securities and Exchange filing Monday, Morgan Stanley has been progressively increasing its involvement in the cryptocurrency sector this year, and has lately doubled down on its exposure on the crypto via the Grayscale Bitcoin Trust (GBTC).
The Morgan Stanley Europe Opportunity Fund had 58,116 GBTC shares valued at around $2.018 million as of July 31, filing documents show. Prior to that, as of April 30, the fund had 28,298 shares for $1.3 million.
The Grayscale Bitcoin Trust sells shares that are exclusively based on the price of bitcoin.
Morgan Stanley has become Grayscale's second-largest stakeholder, trailing only Cathie Wood's ARK Investment Management.
The news was made through the bank's regulatory filings, which were published on September 28. Previous filings from June show their stake climbed by almost 30,000 shares in a single quarter.
Dennis Lynch, chief of Morgan Stanley's asset management company Counterpoint (which is unrelated to the Europe Opportunity Fund), recently spoke at the Morningstar annual investment conference, explaining why he just invested in bitcoin.
"I like to compare bitcoin to Kenny from South Park; he dies every episode and reappears," Lynch explained. "And so... you see in the press, in the media, that bitcoin is dead, that it's passed its prime, and it just keeps on going," Lynch said in quotes by Market Insider.
Morgan Stanley's EOF seeks to maximize capital appreciation by investing in "high quality, established and emerging" European companies that the team believes are "undervalued at the time of purchase."
The investment bank said in April that Grayscale and cash-settled futures would be used to increase Bitcoin exposure to 12 investment vehicles. Morgan Stanley went on to lead a $48 million funding round for Securitize, a Coinbase-backed tokenization platform, marking the bank's first financial investment in blockchain.
This year has seen a surge in cryptocurrency investment, sending the values of the major coins, including bitcoin, to new highs. Bitcoin, the most valuable by market capitalization, is currently trading at approximately $41,000, having increased by over 300% in only the previous year. It's quite volatile, but it's held up well in the face of selling pressure.
Grayscale's valuation rose on the back of the NFT-created Ethereum rally, making it a highly profitable year. Across Morgan Stanley's various institutional funds, this brings its total shares in Grayscale to approximately 6.5 million.