Morgan Stanley Enables Crypto Investments for All Clients
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Morgan Stanley Enables Crypto Investments for All Clients

Morgan Stanley announces that starting from October 15, all clients will have access to cryptocurrency funds, starting with Bitcoin offerings from BlackRock and Fidelity.

Morgan Stanley, one of the largest wealth management firms globally, has communicated to its advisors that as of October 15, all clients will be permitted to invest in cryptocurrency funds. CNBC has reported that this policy represents a significant transformation from their prior restrictions which limited investment to high-net-worth individuals holding over $1.5 million in assets with a high risk tolerance.

This change could potentially release significant amounts of funds currently allocated in alternative assets, steering a fraction of that into cryptocurrencies. According to the Investment Company Institute, US retirement assets reached approximately $45.8 trillion as of June, with $18 trillion in individual retirement accounts (IRAs) and about $9.3 trillion in 401(k) plans.

Morgan Stanley’s Wealth Management segment employs around 16,000 financial advisors and manages about $6.2 trillion in assets, serving over 19 million client accounts.

To mitigate clients’ exposure to cryptocurrency, the firm will implement automated systems, and for the present, advisors can only suggest Bitcoin funds administered by BlackRock and Fidelity. The company is also actively monitoring the market for additional cryptocurrency products.

“Institutions are beginning to see digital assets not just as speculative investments, but as an investable asset class that needs structured access points,” stated Jeff Feng, co-founder of Sei Labs.

In October, Morgan Stanley’s Global Investment Committee recommended a cautious stance on crypto, suggesting a maximum exposure of 4% in high-risk portfolios, 2% in balanced growth portfolios, and no allocation in income or preservation strategies.

The Growing Role of Crypto in Wealth Management

Morgan Stanley’s shift aligns with actions from leading asset managers increasing their exposure to digital assets. In April, Fidelity introduced a suite of retirement accounts offering low-cost access to crypto investments, including a traditional IRA and two Roth IRA options for purchasing Bitcoin.

JPMorgan also announced that it would permit trading and wealth management clients to use cryptocurrency ETFs as collateral for loans.

Moreover, BlackRock is evaluating ways to enhance its crypto offerings following its successful Bitcoin ETF, which generated $245 million in fees in the prior year. On September 11, reports surfaced indicating BlackRock is exploring options to tokenize ETFs using blockchain technology.

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