Brendan McDermid/Reuters
- Morgan Stanley has bought over 28,000 shares in the Grayscale Bitcoin trust.
- The investment underlines Morgan Stanley's commitment to crypto and bitcoin despite their volatility.
- Bitcoin has been recovering over the past few days after dropping below the $30,000 mark last week.
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Morgan Stanley bought 28,289 shares, worth over $1.3 million at the time of the sale, in the Grayscale Bitcoin Trust through its Europe Opportunity Fund, a Securities and Exchange Commission filing shows.
This underlines the firm's commitment to cryptocurrencies. It first gave its funds exposure to digital assets back in April this year.
Five of Morgan Stanley's fund groups can invest up to 25% of their assets in crypto products. Investments must be indirect – so funds are not allowed to purchase bitcoin tokens for example, but they care allowed to invest in funds, trusts, or futures contracts that involve crypto coins. Morgan Stanley was the first major US bank to offer crypto exposure to its high net-worth clients earlier this year.
The Grayscale Bitcoin Trust is the biggest public owner of bitcoin, according to Bank of America. Its value is derived solely from bitcoin and therefore mirrors the performance of the cryptocurrency.
Bitcoin has experienced a highly volatile few months. In mid-April, it reached its highest valuation yet at $64,804.72 – but it has lost over 43% since, according to CoinGecko data. Last week, the token fell below the $30,000 mark for the first time since its rise began in January of this year. It was last trading at $36,384.23, up 5.8% in the 24 hours to 10:48 am E.T. on Tuesday.
The highly volatile nature of cryptocurrencies has been one of the reasons why many major banks have expressed skepticism. Additionally, the environmental impact of the crypto mining process and some of the security concerns associated with the decentralized and widely anonymous tokens have deterred a number of institutional investors.
Just last month, JPMorgan CEO Jamie Dimon cautioned investors against buying into crypto.
Some big banks are however shifting their stance and have become increasingly interested in crypto, as the asset class has become more mainstream and clients have requested exposure to it. Goldman Sachs, for example, reopened its crypto trading desk this year and recent reports claim the bank will offer ether options to clients.