Morgan Stanley brokers could soon pitch Bitcoin ETFs to clients, insiders say

Banking giant Morgan Stanley could soon allow its 15,000 brokers to pitch Bitcoin exchange-traded funds (ETF) to their customers.

According to an AdvisorHub report citing executive sources, the bank has only offered these options on an unsolicited basis, meaning that brokers do not explicitly advise investing in Bitcoin ETF. Customers would have to reach out to their advisors at the brokerages. 

As a part of the policy change, the bank is establishing a groundwork for solicited purchases. This will be accompanied by risk tolerance requirements, alongside limits placed on allocation and trading frequency. 

“We are going to make sure everybody has access to it. We just want to do it in a controlled way,” one source added, signaling the bank’s cautious approach.

Since the introduction of Bitcoin ETFs in January, major brokerage players like Morgan Stanley, Merrill Lynch, and Wells Fargo have all dipped their toes in this market. However, much like Morgan Stanley, they limited purchases to a non-advisory basis.

The recent move from Morgan Stanley is another testament to the growing demand for Bitcoin ETFs among institutional players. According to the second Morgan Stanley executive, this trend has also been seen among their clientele, but Bitcoin is still perceived as a speculative asset.

“For most of those people, it’s quite interesting, so they put in a little bit of money.”

Bitcoin ETFs have brought massive inflows to the cryptocurrency market over the past months. However, the movement seems to be slowing down, with ETF issuer BalckRock registering Zero Daily inflow for the first time on April 24.

Other issuers have also seen dwindling performance, with only idelity Wise Origin Bitcoin Fund (FBTC) and ARK 21Shares Bitcoin ETF (ARKB) seeing inflows of of $5.6 million and $4.2 million, respectively. To date, the Bitcoin ETF market in the U.S. has amassed approximately $12.3 billion in Bitcoin