Morgan Stanley is the first major US bank to offer its wealth management clients access to Bitcoin funds, as CNBC has learned exclusively.
The investment bank, a wealth management giant with $ 4 trillion in client assets, told its financial advisors in an internal memo on Wednesday that it was initiating access to three funds, according to people with direct knowledge of the matter Enabling Bitcoin Ownership.
The move, an important step in Bitcoin’s adoption as an asset class, was taken by Morgan Stanley after customers began demanding exposure to the cryptocurrency, said the people who refused to be identified and shared details about the bank’s internal communications . Bitcoin’s rally last year put Wall Street companies under pressure to consider getting involved in the emerging asset class.
For now, at least, the bank is only allowing its wealthier customers access to the volatile assets: the bank believes it is suitable for those with “aggressive risk tolerance” who have assets of at least $ 2 million owned by the company.
Investment firms must have a minimum of $ 5 million with the bank to qualify for the new shares. In any case, the accounts must be at least 6 months old.
And even for those accredited U.S. investors with broker accounts and enough assets to qualify, Morgan Stanley limits Bitcoin investments to as much as 2.5% of their total net worth, people said.
Two of the funds on offer come from Galaxy Digital, a crypto firm founded by Mike Novogratz, while the third is a joint effort by asset manager FS Investments and bitcoin company NYDIG.
The Galaxy Bitcoin Fund LP and FS NYDIG Select Fund have a minimum investment of $ 25,000 while the Galaxy Institutional Bitcoin Fund LP has a minimum investment of $ 5 million.
Customers are likely to be able to start investing as early as the next month after the bank’s financial advisors complete training tied to the new offerings, respondents said.
The wealth management divisions of Goldman Sachs, JPMorgan Chase, and Bank of America do not currently allow their advisors to offer direct Bitcoin investments.
Earlier this month, JPMorgan filed documents related to a new debt investment tied to a basket of stocks with crypto exposure, such as MicroStrategy, the software company that keeps Bitcoin on its balance sheet, and payment company Square.