Morgan Stanley is reportedly considering adding spot Bitcoin ETFs

Morgan Stanley is allegedly considering adding spot Bitcoin ETFs to its brokerage platform, following the US Securities and Exchange Commission’s (SEC) decision to approve the products earlier this year, in January. While the company has not announced anything official as of yet, many would not find this move surprising, given that it would increase investments on the platform.

Morgan Stanley might list Bitcoin ETFs

Following the SEC’s decision to finally approve Bitcoin ETFs, after 10 years of rejecting every proposal, the local US market now lists 10 spot Bitcoin ETFs. The majority of assets invested into this product are held by Grayscale’s GBTC, BlackRock’s IBIT, and Fidelity’s FBTC.

Since the approval, numerous brokerage platforms have announced their intention to list BTC ETFs, given the rising institutional interest — not only in crypto itself, but in crypto-based exchange-traded products, which are familiar to businesses, and therefore, much safer than crypto itself.

This is why the introduction of Bitcoin ETFs is expected to increase the coin’s investor base since buying ETFs is also considered easier than buying and managing crypto assets. Experts also invest to see registered investment advisor networks and broker-dealer platforms — like Wells Fargo, Merrill Lynch, and Morgan Stanley itself — to see increased investments in such products.

With Morgan Stanley being a leader in alternative investments and private market space, the firm is sure to be among the early listers. So far, Morgan Stanley has over $150 billion in assets under management, and back in 2021, it became the first major bank in the US to offer access to a Bitcoin fund, if only for its wealthy clients.

In its Q1 earnings call, the bank confirmed that it offered exposure to BTC via external crypto funds, such as those offered by NYDIG and Galaxy Digital.

If the bank does decide to add a Bitcoin ETF to its platform, this would align with its strategic focus on wealth management. Typically, its approach is less dependent on capital markets, instead offering revenue sources that are usually less volatile. This focus is also evident from its expansion efforts, such as the acquisitions of Shareworks, Eaton Vance, and E*Trade Financial.

Wells Fargo to become an Authorized Participant for BTC ETFs

Of course, Morgan Stanley is not the only one with interest in Bitcoin ETFs. Earlier this year, in January, Goldman Sachs was allegedly in discussions to become an authorized participant (AP) for Bitcoin spot ETFs by Grayscale and BlackRock.

Authorized participants have a crucial role in the context of ETFs, as they are responsible for creating and redeeming ETF shares. That way, ETFs get to trade closely with their underlying assets. If the talks are successful, Goldman would join a number of other financial giants, such as Cantor Fitzgerald, Jane Street, and JPMorgan Chase, who are already set to be APs for various Bitcoin ETFs.