Morgan Stanley chief says clients show limited interest in Bitcoin

Cryptocurrencies and the blockchain technology behind them have proven durable, but among Morgan Stanley’s clients digital assets do not command substantial demand, according to James Gorman, the chief executive of the financial conglomerate, said, according to CoinDesk.

“I do not consider cryptocurrencies a fad, I do not think they will disappear any time soon. I do not know what Bitcoin should or should not be worth. But these things do not go away, and the blockchain technology underlying them is clearly real and powerful,” Gorman said during a conference call on the results for the third quarter of 2021.

According to him, Morgan Stanley does not offer retail clients direct access to digital assets but allows them to invest in cryptocurrencies through various funds. The head of the conglomerate noted that such activity “is not a major part of the business”.

In March, CNBC reported plans for Morgan Stanley to open access to Bitcoin funds for accredited investors with at least $2 million in capital. The bank limited investments in these instruments to 2.5% of its own capital.

In April, in a filing with the SEC did not rule out adding derivatives on the first cryptocurrency to 12 of its own funds.

In June, asset managers New York Digital Investment Group and FS Investments filed with the SEC an application to register a Bitcoin fund intended for Morgan Stanley clients.

Earlier, the financial conglomerate disclosed a position in Grayscale Bitcoin Trust (GBTC) worth $1.3 million. Subsequently, it increased its investments in the Bitcoin trust through affiliated vehicles such as the Morgan Stanley Insight Fund.

The latter acquired GBTC shares worth $27.7 million. Such investments can reach up to 25% of AUM, according to SEC filings.

Gorman’s remarks contrast with the recent remarks by JPMorgan chief Jamie Dimon, who stated that “Bitcoin is worthless.” The group’s chief executive stressed that his clients disagree, and therefore the firm provides them with suitable investment tools.

Earlier, in September 2021, Morgan Stanley began assembling a team focused on studying the impact of cryptocurrencies on equities and fixed-income instruments.

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