Two anonymous sources would have stated that Morgan Stanley is conducting due diligence to add Bitcoin spot ETFs to its brokerage platform.

Morgan Stanley and the growing interest in Bitcoin spot ETFs

There is a rumor circulating that, if confirmed, could lead to a new turning point in the Bitcoin market. 

The fact is that Morgan Stanley is a leader in alternative investments and private markets.

It is an investment bank founded in New York in 1935, and has now become a multinational investment bank that offers various financial services.

This is a true global giant, with offices in 41 countries and over 80,000 employees. Among its clients are also governments and institutions. 

It is ranked 61st overall in the Fortune 500 list of the largest companies in the USA by revenue in 2023, and 30th in the Forbes Global 2000 ranking. 

It invoices more than 50 billion dollars a year, and has an AUM that exceeds 1.3 trillion. 

His brokerage platform, E*TRADE, is one of the largest US broker-dealer platforms, and is ranked first by Kiplinger’s research and in the Benzinga’s 2023 Global Fintech Awards ranking among trading platforms. 

The addition of Bitcoin ETFs to its trading platform would make them available to millions of users, further increasing their potential success. 

The impact on the price of Bitcoin

Although Bitcoin spot ETFs have been launched on US exchanges for over a month and a half, and have already attracted several billion dollars in new capital, new doors could open for them if they are also offered by large registered investment advisor (RIA) networks and broker-dealer platforms such as those of Morgan Stanley, as well as Merrill Lynch, Wells Fargo, and others.

It is worth noting that already in 2021 Morgan Stanley was the first major US bank to offer its wealthy clients access to funds on Bitcoin, so much so that during the meeting to present the earnings data for the first quarter of the same year, it confirmed that it was already offering its wealth management clients exposure to BTC through a couple of external funds.

So it’s not only absolutely plausible that they now want to add Bitcoin spot ETFs to their brokerage platform, but it would even seem strange if they didn’t do it in the end. 

Indeed, it is rather difficult for the due diligence that is being conducted to lead to negative results in this sense. 

After all, three years ago they explicitly stated that if they had noticed greater interest from their customers towards Bitcoin, they would have provided “appropriate services”. 

The increase in interest

In recent days, such an increase in interest is more than evident, so it is time for Morgan Stanley to offer these “appropriate services”. 

It is evident that among these services there must necessarily be the possibility to buy and sell ETF shares on Bitcoin spot on their trading platform, otherwise customers would go elsewhere to trade them. 

Yesterday’s trading boom in these stocks was sensational. 

Facing the records of the past few days regarding the volume of daily trades, yesterday these almost doubled. They reached almost triple the volume of the launch day, that January 11th when they already seemed very high. 

Faced with such numbers, not only Morgan Stanley, but also all the other major trading platforms in the world seem destined to have to list Bitcoin spot ETFs in the future, under penalty of losing competitiveness. 

Actually, there might be demand even outside the USA, even in those places where similar derivative products like ETNs are already available. 

The fund that invests in BTC

All this is added to the fact that Morgan Stanley is also launching a European fund that will invest in Bitcoin ETFs. 

It will be called Morgan Stanley Europe Opportunity Fund, and the presentation document to the SEC contains an entire paragraph dedicated to exposure to Bitcoin. 

They explicitly state that the fund may have exposure to Bitcoin indirectly through cash-settled futures or indirectly through investments in pooled investment vehicles and exchange-traded products investing in Bitcoin (ETFs). 

The value of the fund’s indirect investments in Bitcoin will be subject to significant fluctuations.