In a report by Morgan Stanley, crypto currencies were recently classified as an institutional investment category after their research department found trends that showed institutional investors were increasingly investing in crypto currencies. The report updated the classification of digital assets based on statistics from the past six months.
The arrival of institutional funds was largely predictable in the crypto currency community, but recent reports indicated that funds were slowly leaking. The Morgan Stanley update supports these reports, noting that these investors have gained "complete confidence". In the past half year, institutions have begun to invest while retail investors have stopped. As a result, the Morgan Stanley Research Group revised its thesis to define the crypto currency as a "new institutional investment layer". The report cites several recent high profile activities to support this change, including the creation of Fidelity's new digital currency services division, a fundraising tour of the Coinbase platform, and regulatory developments.
The report also cited persistent problems that customers found using crypto currencies as an investment category. These problems were due to regulatory uncertainty, lack of structured deposit solutions, and the lack of large financial institutions in this area. However, if institutions gain real confidence as the report notes, it is only a matter of time until these problems are fixed and funds begin to flow.