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Morgan Stanley (MS) to Offer Bitcoin ETFs to Wealthy Clients

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Morgan Stanley (MS - Free Report) is set to offer bitcoin exchange-traded funds (ETFs) through its advisors to cater to wealthy clients' demands for the product, per a CNBC report. The offering will be launched this Wednesday.

Morgan Stanley is enabling its more than 15,000 financial advisors to sell shares of BlackRock Inc.’s (BLK - Free Report) IBIT and Fidelity’s FBTC, according to the people familiar with the matter. Clients must have a net worth of a minimum of $1.5 million.

Spot bitcoin ETF’s approval in January by the Securities Exchange Commission (SEC) led to the expectations that the newly approved investment vehicles would attract the deep pockets of financial institutions to cryptocurrency. However, leading firms like MS often have to go through longer compliance and review procedures before they approve funds to be offered to its clients.

Morgan Stanley is one of the prominent players in the alternative investment and private market space, with more than $1.5 trillion in assets under management as of Jun 30, 2024. It was the first major U.S. bank to offer Bitcoin fund access to its wealthy clients in 2021.
 
The move aligns with the company’s focus on the Wealth Management (WM) segment as it becomes less dependent on capital markets revenue sources. The company’s strategic expansion efforts, including the buyouts of Eaton Vance, E*Trade Financial and Shareworks, are steps in this direction. Also, the WM segment’s total client assets witnessed a five-year (2018-2023) compound annual growth rate of 17.4%.

Though the tough operating backdrop might lead to volatility in the metric in the near term, the trend is expected to keep improving once the operating environment becomes more favorable.

Shares of Morgan Stanley have gained 12% in the past year.

MS presently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

In April, Coindesk reported that The Goldman Sachs Group, Inc. (GS - Free Report) was added as the authorized participant (“AP”) for the spot bitcoin ETF, which Grayscale and BLK launched.

As an AP for spot bitcoin ETF, Goldman had been entrusted with the responsibility of tracking the ETF share price with underlying assets of the fund.


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