- Morgan Stanley is considering a policy shift that could drive up Bitcoin ETF demand.
- Ahead of this policy shift, the bank is setting up investor safety measures.
- The plan promises to be significantly bullish for Bitcoin.
In January 2024, the U.S. SEC finally approved spot Bitcoin ETFs after almost a decade of applications. Following their approvals, these funds, in three months, have surpassed most of the expectations set for them for the calendar year. But they may still be yet to scratch the surface.
So far, banks have only taken an ultra-conservative approach in making Bitcoin ETFs available to their customers—a status quo that Morgan Stanley, a bank with over $1.5 trillion in assets under management (AUM), may be set to change.
Morgan Stanley Considers Orange-Pilling Customers
While Morgan Stanley has offered customers access to spot Bitcoin ETFs since their January 2024 approval, like many of its peers, this offering has been made available on an unsolicited basis. As such, wealth advisors have not been allowed to approach investors about investing in the funds, meaning investments only come through when interested investors themselves approach advisors about allocating a percentage of their wealth to the newly launched funds.
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Per a Wednesday, April 24, AdvisorHub report, however, Morgan Stanley could be gearing up to switch to a solicited model. This shift promises to allow its 15,000 brokers to approach investors about investing in Bitcoin ETFs, a move that could significantly bolster spot Bitcoin ETF demand. AdvisorHub made this report citing two senior executives who are familiar with the matter.
According to these executives, the bank is in the process of establishing safety measures for this switch as it would likely bring on additional liability to the firm. Outlined measures included setting risk tolerance requirements and limits to portfolio allocation and trading frequency.
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“We’re going to make sure that we’re very careful about it. We are going to make sure everybody has access to it. We just want to do it in a controlled way,” one executive reportedly asserted.
Morgan Stanley has yet to return a DailyCoin request for confirmation and further details about the planned policy shift.
Bullish for Bitcoin?
Per BitMEX Research data as of Thursday, April 25, since launch, spot Bitcoin ETFs have amassed net inflows of about $12.3 billion with about $53.6 billion in total AUM. The demand for these funds has been a key contributor to Bitcoin’s impressive run in 2024, which has seen it clinch new all-time highs of around $74,000.
This demand only looks set to grow should Morgan Stanley go ahead with its plan to approach customers to invest in spot Bitcoin ETFs.
At the same time, as recently highlighted in a Coinbase Institutional report, the demand for Bitcoin ETF has already outweighed the supply generated by miners before the recent halving. As a result, a continued rise in demand could have significantly bullish price implications as supply drops.
On the Flipside
- Speculation that Morgan Stanley was set to offer spot Bitcoin ETFs to its clients fully came first on April 3. This speculation was, however, dispelled by Senior Bloomberg ETF Analyst Eric Balchunas.
- Earlier this week, Morgan Stanley filed a prospectus to add Bitcoin exposure to its Discovery Portfolio Fund and its Growth Portfolio Fund.
Why This Matters
Bitcoin enthusiasts have tipped institutional demand to send the asset’s price soaring. Morgan Stanley’s reported plan could drive this demand even higher, potentially generating a positive impact on the value of Bitcoin.
Read this for more on spot Bitcoin ETFs:
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