With a rising interest in Bitcoin from institutional investors, American multinational investment bank, Morgan Stanley will soon launch access to bitcoin funds to give its wealthy clients access to the popular cryptocurrency.
The bank disclosed the move in an internal memo as seen and published by CNBC today, citing growing client demand for Bitcoin.
According to people familiar with the matter, the bank which holds $4 trillion of client assets under management (AUM), will allow its clients to directly invest in two Bitcoin managed by Michael Novogratz’s Galaxy Digital, and another offered by FS Investments in collaboration with NYDIG.
Morgan Stanley restricted the service to only wealthy clients because it believes Bitcoin investment is suitable for people with “aggressive risk tolerance.”
Per the report, investment firms that want to partake in the new offering would need to have a minimum of $5 million at the bank and must have operated the account for at least six months. Individual investors must hold $2 million.
Furthermore, qualified U.S. investors with brokerage accounts and adequate assets are also limited to their bitcoin investments, and can only use 2.5% of their portfolio to invest in the offering.
The Galaxy Digital funds named The Galaxy Bitcoin Fund LP and Galaxy Institutional Bitcoin Fund LP, have a minimum investment of $25,000 and $5,000, respectively, while the F5 and NYDIG Select Fund minimum investment is pegged at $25,000.
The sources disclosed that the investment may likely kick-off from next month immediately after the bank’s financial advisors complete the training courses for the funds, to enable them to acquire better knowledge about the service.
Traditional Financial Institutions Embracing Bitcoin
Banks are gradually changing from their hostile reception of cryptocurrencies into getting more involved with the assets.
While it seems like a clear case of “if you can’t beat them, join them,” the banks believe offering bitcoin-related services would help retain customers who are growing weary of the archaic traditional financial system.
In a similar development, America’s oldest bank BNY Mellon announced last month that it would store and process cryptocurrency transactions on behalf of its clients.