Morgan Stanley filed a registration for 12 mutual funds that may have exposure to Bitcoin through Grayscale’s Bitcoin Trust and cash-settled futures. As per the March 31 filing with the U.S. SEC, Morgan Stanley advocated that it had updated the “Investment Policies and Strategies” section for 12 institutional portfolios. The update allows Morgan Stanley Institutional Fund, Inc. to attach Bitcoin to various portfolios through Grayscale Bitcoin Trust and cash-settled futures.
Morgan Stanley allocated BTC exposure over 25% through foreign subsidiaries in an SEC filing for 12 of its institutional funds such as Advantage, Asia Opportunity, Counterpoint Global, Developing Opportunity, Global Advantage, etc. As per the filing, the GBTC allocation funds will get the same tax treatment as a direct Bitcoin investment. The investment signifies insurance against adverse movements in conventional markets like bonds and stocks.
Morgan Stanley Highlights the Risks which Funds Could Undergo in the Filing
Morgan Stanley’s decision indicates a developing faith in Bitcoin as an asset class ready for institutional investment. Moreover, the filing further emphasizes areas of risks that these funds could experience due to exposure to the volatile Bitcoin market. Additionally, Morgan Stanley notes in its filing that Bitcoin and Bitcoin futures have presented significant price volatility relative to traditional asset classes.
The filing also involves that these investments may exhibit a low or negative correlation with stocks and bonds over the long term. Moreover, they are alternative hedging instruments to gold, bonds, and other commodity-linked instruments. Morgan Stanley has also associated with Bithumb amid rumors that the bank was eyeing a significant Korean exchange stake. Morgan Stanley has even contemplated purchasing Bitcoin outright through its counterpart global investment arm.
The bank is studying ways to engage with digital assets by circumventing regulatory constraints in the U.S. Last month, Morgan Stanley announced that it would start providing its institutional private wealth clients access to Bitcoin-related funds. Morgan Stanley contended that it would provide clients access to Bitcoin investing, though only under particular conditions.
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