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Morgan Stanley First Wall Street Major To Allow Advisors to Recommend Bitcoin ETFs
Prepare to be asked about crypto
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Today we’re talking about the inroads crypto is making in the financial advisor space, and the implications of Morgan Stanley being the first major Wall Street bank to let its advisors recommend crypto ETFs.
So, let’s get into the Industry Chatter!
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INDUSTRY CHATTER
Morgan Stanley recently became the first major Wall Street bank to permit its financial advisors to offer bitcoin ETFs to clients, marking a significant step in cryptocurrency's mainstream adoption. As of early August, the bank's 15,000 advisors can recommend two specific bitcoin ETFs: BlackRock's iShares Bitcoin Trust (IBIT) and Fidelity's Wise Origin Bitcoin Fund (FBTC), paving the way for wider acceptance of crypto in the financial advisor industry.
Taking It Easy
For now, Morgan Stanley is taking a cautious approach:
Only eligible clients with a net worth of at least $1.5 million, high risk tolerance, and interest in speculative investments will be considered suitable.
Investments are intended for taxable brokerage accounts, not retirement accounts.
The bank will monitor clients' cryptocurrency holdings to prevent excessive exposure.
This move comes more than six months after the SEC approved 11 spot bitcoin ETFs in January. Despite bitcoin's volatility and criticism from prominent figures like Jamie Dimon and Warren Buffett, its integration into mainstream finance continues to progress.
Other Wall Street Banks Yet To Follow
Morgan Stanley's decision contrasts with peers like Goldman Sachs, JPMorgan, Bank of America, and Wells Fargo, who are not proactively offering these ETFs as of now. Morgan Stanley's shift responds to growing client demand and an evolving digital asset market.
This isn't Morgan Stanley's first venture into crypto investments. In 2021, it approved the purchase of private funds from Galaxy and FS NYDIG. The bank is also monitoring newly approved ether ETFs but hasn't decided on offering access to these products through advisors yet.
Growing Interest And Demand
Morgan Stanley's cautious embrace of bitcoin ETFs reflects the ongoing tension between traditional finance and the emerging cryptocurrency market. As client interest grows and regulatory clarity improves, other major financial institutions may follow suit, potentially accelerating cryptocurrency's integration into mainstream investment portfolios.
Financial advisors should take note. If you want to learn more about crypto investments, the latest developments, and regulatory updates, sign up for Future Finance: the newsletter where fintech, crypto, and the future of finance collide.
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MARKET RECAP
Recent economic data has eased the recession fears that loomed earlier in August, diminishing the likelihood of large rate cuts by the Federal Reserve and boosting investor confidence in risk assets.
The S&P 500 and Nasdaq 100 indices saw their strongest week since late October 2023 as of Friday midday trading, driven by encouraging economic releases during the week.
Inflation continues to decelerate. In July, the Consumer Price Index inflation gauge increased by 2.9% year-over-year — the slowest pace since March 2021 and below both the previous month's rate and the expected 3%. Core inflation, which excludes food and energy prices, edged down from 3.3% to 3.2%, matching analyst expectations.
Initial jobless claims rose less than anticipated for the second straight week, suggesting the uptick in unemployment in July may have been a temporary blip rather than a sign of a broader cooling labor market trend.
Moreover, retail sales surged by 1% in July, marking the strongest monthly growth since January 2023 and significantly surpassing expectations. Consumer confidence also exceeded forecasts in August, further strengthening the economic outlook.
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Economic Data
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Tuesday: Atlanta Fed President Bostic’s speech
Wednesday: FOMC meeting minutes, U.S. crude oil inventories
Thursday: Japanese inflation, U.S. monthly existing home sales
Friday: U.S. monthly new home sales
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