As of today Morgan Stanley has now crypto traded funds that can now be traded for its top tier customers.
The crypto funds will only be offered to clients who describe their risk tolerance as "aggressive" and who have at least $2MM in assets held by the firm. MS's wealth division manages $4 trillion for mostly high-net-worth individuals and families.
There are growing demand for crypto and Morgan Stanley is fortunate to have some of its existing managers who held on to their 2017 investments in crypto during that down turn. Through that experience and the most recent boom in crypto has made the bank take a head start among others at investing in cryptocurrency.
Morgan Stanley intends to limit their clients risks when investing in these assets, but it again is proving that banks are now accepting that cryptocurrency is likely here to stay.
In addition to its restrictions on client assets, individual firms need to have at least $5MM in client money with MS to qualify for access to the new funds. Also, accounts must be more than six months old, so clients can rest assured that the new offerings won't provoke a rush of clients eager to pay MS for selling them exposure to these exclusive crypto funds. Morgan Stanley is also capping crypto investments at 2.5% of clients' total net worth.
Offering BTC Funds
Morgan Stanley will have three funds to trade with related to having some form of BTC in them. In addition Morgan Stanley's subsidiary Counterpoint Global already has $500 million invested in Microstrategy, ticker symbol MSTR, the well known public company of Michael J. Saylor who is massively bullish with BTC and has bought with its company's cash over 10k of BTC.
Two of the Morgan Stanley funds are from Galaxy Digital which was founded by Mike Novogratz. Galaxy Digital is a financial firm that specializes investing and managing crypto and crypto related products. Their most recent investment is Republic where its returns has gain over 400%.
Digging a little into Galaxy Digital they have two funds that came into inception in last year, 2020, and news had mentioned both funds had new institutional investors.
Galaxy Institutional Bitcoin Fund LP raised $55.1 million while its smaller sibling, Galaxy Bitcoin Fund LP, raised $3.6 million. A third fund called Galaxy Institutional Bitcoin Fund, Ltd, reported raising $45 million from 13 investors Wednesday, bringing the institutional total to $100.1 million. (Nov. 2020)
It would be a safe bet that two out of three of these funds are linked to what Morgan Stanley has to offer their clients.
Morgan Stanley's third fund is a joint effort from asset manager FS Investments and bitcoin company NYDIG. FS Investments is an capital asset company where they specialize in creating portfolios and mitigate investment risks. While NYDIG is a financial firm specializing in btc investing and targets big investors such as institutions, banks, and pension funds.
It appears Morgan Stanley in house has yet to have enough experience to have their own independent funds based on their forged relationships with Galaxy Institutional, FS Investments, and NYDIG. However it is still a head start in crypto investing in regards to banks since Morgan Stanley is the first to offer actual opportunities to their clients to invest in funds related to crypto. Exciting news indeed and it sets an example of what future banks will have to do the same and more when it comes to investing in crypto.
None of what I write is financial advice. It is for entertainment purposes only. Thanks for reading!
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