Morgan Stanley has announced that its wealth advisors will soon be able to offer bitcoin exchange-traded funds (ETFs) to select clients, according to CNBC. This development marks a notable shift as Morgan Stanley becomes the first major Wall Street bank to permit such solicitations, according to sources familiar with the bank's internal policies.
Starting August 7, the firm's 15,000 financial advisors will be able to recommend two specific bitcoin ETFs: BlackRock's iShares Bitcoin Trust and Fidelity's Wise Origin Bitcoin Fund. This decision follows the approval of 11 spot bitcoin ETFs by the U.S. Securities and Exchange Commission in January, paving the way for more accessible and tradable bitcoin investment vehicles.
The move from Morgan Stanley reflects a growing acceptance of digital assets in mainstream finance, despite the volatility and challenges that have characterized the cryptocurrency market. Bitcoin, for example, has endured market downturns, the collapse of major crypto exchange FTX, and criticism from leading financial figures such as JPMorgan Chase CEO Jamie Dimon and Berkshire Hathaway CEO Warren Buffett.
Historically, major wealth management firms have been cautious about embracing bitcoin ETFs. Until now, Goldman Sachs, JPMorgan, Bank of America, and Wells Fargo have restricted their advisors from pitching these products, only allowing trades if clients actively sought them out.
Morgan Stanley's decision is driven by increasing client demand and the need to stay competitive in the evolving digital asset marketplace. However, the bank is proceeding with caution. Only clients with a net worth of at least $1.5 million, a high tolerance for risk, and an interest in speculative investments will be eligible for bitcoin ETF solicitations. Furthermore, these investments will be restricted to taxable brokerage accounts and not available for retirement accounts.
To mitigate risks, Morgan Stanley plans to closely monitor clients' crypto holdings to prevent excessive exposure to the volatile asset class. Currently, the only approved crypto investments for solicited purchase at Morgan Stanley are the bitcoin ETFs from BlackRock and Fidelity. The bank previously offered private funds from Galaxy and FS NYDIG, but these were phased out earlier this year.
The bank is also keeping an eye on the market for newly approved ether ETFs but has not yet decided whether to provide access to these products.
