On January 10th, 2024, the US Securities and Exchange Commission approved the Bitcoin ETF applications of 11 funds, including Fidelity, Grayscale, and Blackrock’s IBIT. This decision led to an increase in trading volume as more banks, funds, and individual traders entered the market. One notable participant that has been gradually increasing its holdings is Morgan Stanley.
In a recent 13F-HR/A filing with the SEC, Morgan Stanley disclosed $272 million worth of Bitcoin ETFs at the end of the third quarter. While this may seem like a significant investment, it only represents 2% of the total assets under management, which are currently valued at $1.3 trillion.
Morgan Stanley has diversified its BTC holdings across various funds, including Blackrock’s iShare Bitcoin Trust (IBIT). The company reported owning 5.5 million shares of the BTC ETF purchased in the second quarter. The value of Morgan Stanley’s holdings with Blackrock has increased by 10.2% from $187.7 million to $209 million.
Additionally, Morgan Stanley holds a substantial stake in Ark 21 Shares but has reduced its holdings with Grayscale. Initially, the company had holdings worth $270 million with Grayscale, which have now decreased to $148,000.
Morgan Stanley has adopted a crypto-friendly strategy and is known for being one of the top asset managers with a significant interest in Bitcoin and other cryptocurrencies. Despite being a late entrant into Bitcoin ETF investments, the company has managed to build one of the largest holdings in the United States.
In August 2024, Morgan Stanley authorized its managers to offer Bitcoin ETFs as an option for its wealthy clients. This move was significant given the company’s massive asset base, as allocating just 1% of its assets to Bitcoin ETFs could result in an inflow of $130 billion.
The approval of spot ETFs by the SEC has been a game-changer for the industry, signaling Bitcoin’s maturity as an asset class and its integration into the financial market. Bitcoin ETFs have seen impressive net flows in recent days, with funds purchasing over $470 million worth of BTC. IBIT led the way with a $309 million inflow, while ARKB and GBTC also experienced significant inflows.
Overall, institutional adoption of Bitcoin and other cryptocurrencies is on the rise, with major players like Morgan Stanley increasing their exposure to digital assets. The future of crypto investments looks promising, as more traditional financial institutions embrace this emerging asset class.
