morgan stanley bitcoin

Global Investment Bank Morgan Stanley Launches Dedicated Cryptocurrency Research Team

15/09/2021 by Idelto Editor

Global investment bank Morgan Stanley is establishing a new cryptocurrency research team. “The launch of dedicated crypto research is in recognition of the growing significance of cryptocurrencies and other digital assets in global markets,” the bank said.

Morgan Stanley Sets Up New Research Team

Morgan Stanley is launching a dedicated cryptocurrency research team, Bloomberg reported Monday, citing the bank’s internal memo to staff it has seen.

Led by Sheena Shah, the firm’s lead cryptocurrency analyst, the team will research cryptocurrencies’ impact on both equities and fixed income globally.

Shah will be based in London, where she will report to Adam Wood, who leads Morgan Stanley’s fintech and payments research team in Europe. She will also report to James Faucette, who leads the firm’s fintech and payments research team in the U.S.

The memo states:

The launch of dedicated crypto research is in recognition of the growing significance of cryptocurrencies and other digital assets in global markets.

Morgan Stanley was among the first major investment banks to embrace cryptocurrency. In March, the firm made three bitcoin funds available to its clients. In April, the firm added bitcoin to 12 mutual funds’ investment strategies.

Several other major financial institutions have also established dedicated cryptocurrency teams, including Bank of America (BOFA) which created a crypto research team in July. Last week, asset management firm Franklin Templeton posted a job notice for an “investment research analyst” for cryptocurrency.

A growing number of investment banks have begun offering or are in the process of offering cryptocurrency services to their clients. They include Goldman Sachs, Citigroup, Standard Chartered, Wells Fargo, and DBS.

What do you think about Morgan Stanley launching a dedicated crypto research team? Let us know in the comments section below.

Morgan Stanley Says Central Bank Digital Currencies Not a Threat to Cryptocurrencies

20/04/2021 by Idelto Editor

Major investment bank Morgan Stanley believes that central bank digital currencies are not a threat to the existence of cryptocurrencies. The bank believes that both types of digital currencies can coexist because they serve different purposes and have different appeals.

Cryptocurrencies and CBDCs Can Coexist

Morgan Stanley’s analysts, including chief economist Chetan Ahya, discussed the impact of central bank digital currencies (CBDCs) on bitcoin and other cryptocurrencies in a report published last week. They wrote:

Cryptocurrencies will still exist, as they continue to serve other use cases … For instance, some cryptocurrencies can function as a store of value … as some segments of the public do not place their full faith in fiat currencies.

The analysts explained that the uses and appeals of central bank digital currencies and cryptocurrencies are different. They added that cryptocurrencies can be both a store of value, similar to gold, and a speculative asset.

A growing number of people have said that bitcoin is a store of value, including the pro-bitcoin U.S. Senator Cynthia Lummis and the Federal Reserve Bank of Dallas President Rob Kaplan.

Regarding why investors are increasingly interested in bitcoin and other cryptocurrencies, the Morgan Stanley analysts described:

Investors’ interest in cryptocurrencies has risen alongside the unprecedented monetary and fiscal policy response to the pandemic.

In contrast, Morgan Stanley said in the report that government-backed digital currencies probably pose the biggest risk to stablecoins.

A growing number of central banks are increasingly interested in issuing their own digital currencies. The Bank of International Settlements (BIS) says 86% of the world’s central banks are studying digital currencies in varying stages.

Morgan Stanley believes that CBDCs would be quite different from cryptocurrencies as they are unlikely to use blockchains. The European Central Bank (ECB) has similarly said that CBDCs have little to do with cryptocurrencies, which the bank sees as speculative assets and not actual currencies.

Do you think cryptocurrencies and central bank digital currencies can coexist? Let us know in the comments section below.

Morgan Stanley Adds Bitcoin to 12 Mutual Funds’ Investment Strategies

02/04/2021 by Idelto Editor

Morgan Stanley has filed with the U.S. Securities and Exchange Commission (SEC) to add bitcoin exposure to 12 of its mutual funds’ investment strategies. These mutual funds may invest in bitcoin futures as well as obtain indirect exposure to the cryptocurrency through investments in Grayscale Bitcoin Trust, the filing details.

Bitcoin Exposure for 12 Morgan Stanley Mutual Funds

Morgan Stanley Institutional Fund Inc., the asset management division of Morgan Stanley, filed a statement of additional information supplement with the U.S. Securities and Exchange Commission (SEC) on Wednesday. The purpose of the filing is to enable 12 of the investment bank’s mutual funds to start adding exposure to bitcoin.

The company explained that “Bitcoin Exposure” has been added to the “Investment Policies and Strategies” of 12 mutual fund portfolios, under “Other Securities and Investment Strategies” section.

The mutual funds that may start adding bitcoin exposure are Advantage Portfolio, Asia Opportunity Portfolio, Counterpoint Global Portfolio, Developing Opportunity Portfolio, Global Advantage Portfolio, Global Permanence Portfolio, Global Opportunity Portfolio, Growth Portfolio, Inception Portfolio, International Advantage Portfolio, International Opportunity Portfolio, and Permanence Portfolio.

The filing describes:

Certain funds may have exposure to bitcoin indirectly through cash settled futures or indirectly through investments in Grayscale Bitcoin Trust (BTC) (‘GBTC’), a privately offered investment vehicle that invests in bitcoin.

Furthermore, the filing details that each portfolio “may gain exposure to bitcoin and other assets by investing up to 25% of its total assets in a wholly-owned subsidiary of the fund organized as a company under the laws of the Cayman Islands.” In addition, “Each subsidiary may invest in GBTC, cash-settled bitcoin futures and other investments.”

Regarding the futures contracts based on BTC that some funds may invest in, the filing clarifies that “The only bitcoin futures in which a fund may invest are cash settled bitcoin futures traded on futures exchanges registered with the CFTC [the U.S. Commodity Futures Trading Commission].”

Recently, Morgan Stanley revealed that it will be offering wealthy clients access to three bitcoin investment funds. In February, the firm’s head of emerging markets and chief global strategist said, “cryptocurrencies are here to stay as a serious asset class.”

What do you think about Morgan Stanley adding bitcoin exposure to its mutual funds? Let us know in the comments section below.

Morgan Stanley: Cryptocurrencies Here to Stay as Serious Asset Class, Bitcoin Making Progress to Replace Dollar

15/02/2021 by Idelto Editor

Morgan Stanley’s chief global strategist says that “regardless of where the price of bitcoin goes next, cryptocurrencies are here to stay as a serious asset class.” He added that bitcoin is making progress towards replacing the dollar as a medium of exchange.

Morgan Stanley Bullish on Bitcoin and Cryptocurrencies

Morgan Stanley’s head of emerging markets and chief global strategist, Ruchir Sharma, published a report entitled “Why Crypto Is Coming Out of the Shadows” on the Morgan Stanley website last week.

“Despite the jitters natural in a global pandemic, cryptocurrencies are rapidly gaining popular support as alternatives to gold (a store of value) and the dollar (as a means of payment),” he began. The strategist elaborated:

We see fundamental reasons to believe that — regardless of where the price of bitcoin goes next — cryptocurrencies are here to stay as a serious asset class.

Sharma explained that one reason “is growing distrust in fiat currencies, thanks to massive money printing by central banks.” Another reason is “generational,” as young people view cryptocurrency as an improvement over metal coins. He continued: “The worst knock on cryptocurrency as a store of value is its volatility, but unflinching demand from millennials has helped lower the volatility of bitcoin, even during the pandemic.”

The strategist added that this age group believes “the open-source software behind Bitcoin makes it more transparent, transferrable and trustworthy than paper money printed by governments.” He emphasized that “this crypto-confidence may reach even deeper in emerging markets, where distrust in centralized authority runs high.” Sharma opined:

Governments have been slow to recognize this evolution … Bitcoin is also starting to make progress on its ambition to replace the dollar as a medium of exchange.

When the pandemic hit, the dollar was the world’s preferred reserve currency. However, “led by the Fed, every major central bank has been printing money madly to keep economies afloat during the pandemic, undermining confidence in all national currencies,” he described, adding that 20% of “all dollars in circulation were printed in 2020, and that binge was a huge boost to the appeal of bitcoin.”

The Morgan Stanley strategist detailed:

Today, virtually all bitcoins are held as an investment, not used to pay bills, but that is changing.

“Last year popular payment platforms started accepting bitcoin and other digital currencies, a major step forward in their campaign to challenge the dollar,” he concluded.

Last week, it was also revealed that Elon Musk’s Tesla will start accepting bitcoin as a means of payment for its products in the near future. Furthermore, Paypal and Mastercard are working to allow merchants on their networks to accept cryptocurrencies.

Do you agree with the Morgan Stanley strategist? Let us know in the comments section below.

Morgan Stanley Massively Increases Bitcoin Exposure Through Microstrategy

09/01/2021 by Idelto Editor

Global investment bank Morgan Stanley has increased its bitcoin exposure manyfold by investing in Microstrategy, the Nasdaq-listed company which currently holds about 70,470 bitcoins. Morgan Stanley now has a 10.9% stake in Microstrategy.

‘Even Banks Want Bitcoin’

Global financial services firm Morgan Stanley has significantly increased its exposure to bitcoin, the company’s filing with the U.S. Securities and Exchange Commission (SEC) on Friday shows.

Morgan Stanley has declared that it now owns 792,627 shares of Microstrategy. The Nasdaq-listed company has been stacking bitcoin over the past six months and now holds about 70,470 bitcoins in its treasury. At the current BTC price, Microstrategy’s bitcoin stash is worth nearly $2.9 billion. Morgan Stanley’s investment represents a 10.9% stake in Microstrategy whose share price recently soared to $531.64.

According to analyst Kevin Rooke, Morgan Stanley held 142,908 shares of Microstrategy in the third quarter. Commenting on the investment bank’s latest investment, he tweeted Friday:

That’s actually a 455% increase, up from 142,908 shares in Q3 … Even the banks want bitcoin.

Microstrategy was the first major public company to make bitcoin its primary reserve asset. Its pro-bitcoin CEO Michael Saylor said in December that his company now had “an aggregate of 70,470 bitcoins purchased for $1.125 billion at an average price of $15,964 per bitcoin.” Microstrategy’s bold move into BTC had caused Citigroup to downgrade its stock to a sell rating. However, the market continued to favor the company as its share price has surged almost 86% since the downgrade and it is up 25% year-to-date.

Since Microstrategy’s major bitcoin buys, a number of other institutional investors have revealed that they have also invested in BTC or have plans to do so in the near future. They include Blackrock, Massmutual, Ruffer, and Skybridge. Meanwhile, bitcoin’s price has repeatedly hit record highs. JPMorgan has predicted that the price of the cryptocurrency could reach $146,000 while Guggenheim Investments sees bitcoin’s value at $400,000.

What do you think about Morgan Stanley’s bitcoin strategy? Let us know in the comments section below.