Morgan Stanley to Offer Bitcoin Funds for Wealthy Clients | Visa Plans to Enable Bitcoin Purchases at 70M Merchants

Top stories and news you should know in the bitcoin, crypto, and decentralized markets...


High Level

  • Bitcoin funds will be offered by the first US bank founded by J.P. Morgan’s grandson, Henry Morgan, in 1935 that is now a registered Broker/Dealer and a member of SIPC (so it’s not actually a bank, although they assist and enter arrangements with banks and other third parties to assist in offering products and services to their clients)

  • From estimates taken in December 2020, Morgan Stanley globally ranks third in assets under management (AUM) behind Swiss firms UBS and Credit Suisse and just ahead of Bank of America operating in all 50 states including Washington D.C. having 15,6000 wealth managers across 600 branches with $4T in client assets


Drilling Down Deeper

News of an internal memo began circulating this Wednesday that Morgan Stanley would launch access for three funds to enable ownership of bitcoin to their clients.

As the largest financial institution based in the United States besides the Federal Reserve, this news is being cheered on by the bitcoin community despite years of making fun and ridiculing the bailout banks and firms from 2008 and prior crises. Morgan Stanley’s offerings for bitcoin funds will include a joint effort from FS Investments and NYDIG in one fund as well as a couple of funds from Galaxy Digital founded by Mike Novogratz. Presenting another strong sign for the future prospects of the adoption and network growth for bitcoin including the emerging asset class growing around it, increasing the potential of other and financial institutions and investment firms following them into the surging bitcoin and crypto marketplaces.

While the news is great on the surface level seeing that the largest and one of the most prestigious American investment firms is entering the bitcoin market, rules allowing who can access these funds are limited only to qualifying investors though and exclude their common clients that do no have at least $2M in assets held by Morgan Stanley. Investment companies that are clients of the firm will need at least $5 million at the bank to qualify for access to the new stakes in the three bitcoin offerings. Morgan Stanley only allowing those with “an aggressive risk tolerance” as well as the necessary assets held by the firm to qualify, they will also be restricting the accredited investors from investing more than 2.5% of their total net worth into the bitcoin offerings.

Their clients will be able to start investing as soon as April after Morgan Stanely’s financial advisors complete training courses related to the new offerings. The Galaxy Bitcoin Fund LP and FS NYDIG Select Fund have minimum investments of $25,000, and the Galaxy Digital Institutional Bitcoin LP has a $5 million minimum. Bank of America Merrill Lynch, Goldman Sachs, and JPMorgan Chase’s wealth management units have not made any efforts for their financial advisors to make any direct bitcoin investments or offerings despite the growing client interest and price appreciation over the past year.

After seeing JPMorgan file for a new debt instrument that would be tied to a basket of stocks with bitcoin and crypto exposure earlier this month, it may have sparked a goldrush or space race into bitcoin and the businesses that are integrating it into their balance sheets, business models, or customer experiences. It is likely that these sorts of headlines from major investments and mainstream adoptions will keep coming over the rest of the year. Bitcoin and crypto is showing its importance and staying power in ways that the traditional finance community never imagined, and now they are trying to enter the market without fueling an even bigger bitcoin boom that gets away from them before they can even get their hands on it for themselves and their clients.

In reality, nobody needs them to buy bitcoin anyway and by only allowing their biggest and best clients into these new funds Morgan Stanley is really just posturing more than doing anything that’s actually substantial for all of their clientele. Their clients must really love them!

TL;DR The bailout boys and girls with their clueless financial advisors saying bitcoin would be a flop or a fraudulent Ponzi scheme got caught off guard with its corporate success and were completely wrong about it, so now they’re experiencing FOMO over the potential gains as well as stressing over all of the fees they could’ve been charging.

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News You Should Know

NYDIG Head Says Major Firms Will Announce Bitcoin “Milestones” Next Week

Stone Ridge Asset Management co-founder and NYDIG CEO, Robby Gutman, noted that he believes that bitcoin is on the brink of mass adoption. As a guest on the podcast “On the Brink,” he hinted at some announcements from some of his firm’s strategic partners that will dramatically shift the traditional financial landscape saying, “I know starting more or less next week, you’re going to see an absolute drumbeat of pretty game-changing milestones from some of these firms...”

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The Case Against Bitcoin, According to Bank of America Experts

In the face of corporate and institutional adoption, Bank of America “experts” (LOL) believe “guberment” promoted CBDCs are more likely to displace cash in the long-term rather than bitcoin thus reducing its demand. Their dog and pony show indicates they do not pay much attention to the M1 and M2 figures released by the Federal Reserve Economic Data tools by the St. Louis Fed and are clearly unware of the fact that bitcoin has fixed supply of 21,000,000 BTC is a feature, not a bug…

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Visa Plans to Enable Bitcoin Purchases at 70M Merchants

To keep up with PayPal’s move into bitcoin adoption, the payment processing behemoth is rolling out plans for capabilities to facilitate bitcoin purchases as well as spending functionalities. According to the CEO, the firm is working to be a core intermediary in financial transactions on the Bitcoin network even as the asset sees mainstream adoption as the digital global reserve currency.

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We’re trying to do two things. One is to enable the purchase of Bitcoin on Visa credentials. And secondly, working with bitcoin wallets to allow the bitcoin to be translated into a fiat currency and therefore immediately be able to be used at any of the 70 million places around the world where Visa is accepted.”

— Alfred Kelly, CEO of Visa


Market Dashboard

TOTAL CRYPTO ASSET MARKET CAPITALIZATION = $1.8T
Bitcoin Dominance = 61%
Ethereum Dominance = 12%
(over 8,800 cryptocurrencies)
BITCOIN (BTC)
Last Close = $58,800 (as of Mar. 19, 2021)
Market Capitalization = $1.1T
YTD Performance = +100%
*
NEW ALL-TIME-HIGH @ $61,724!
ETHEREUM (ETH)
Last Close = $1826 (as of Mar. 19, 2021)
Market Capitalization = $210.25B
YTD Performance = +143%

Bitcoin over the week has seeing a largely one-sided market in the favor of BTC sellers from Asia with selling volumes hitting a two week high after a quiet couple of weeks of buying out of the Americas and Europe. Ethereum and the altcoins on top of it have been trailing slightly underperforming Bitcoin and really lagging behind Cardano with news of Coinbase adding support for ADA trading sending it parabolic over the past couple of days. Crypto assets are still being put in the corner as many market participants are opting for the high-flying hot potato NFT market that is seeing more price action and volatility than many altcoins, cex coins, dex coins, and privacy coins. The wave of hype and optimism surrounding NFTs has been helpful for artists, musicians, celebrities, developers, and graphic designers cashing in on the excitement is looking to be larger than last year’s “DeFi Summer.” Keep a close eye on the action, it may boom before going bust which then could lead to another stampede of capital back into the bitcoin market that could lift it back into all-time-high territory. The bitcoin community still has its laser eyes on the near-term price target of $100,000!


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DISCLAIMER
An investment in any asset or strategy involves a high degree of risk and there is always the possibility of loss, including the loss of principal. Nothing written above may be considered as an offer or solicitation to purchase or sell securities or other services. The trading and investing ideas and strategies discussed above are not recommendations to buy or sell any security and are not intended to provide any investment advice and/or recommendations of any kind, but are made available solely for educational and informational purposes. Before acting on information from above, you should consider whether it is suitable for your particular circumstances and strongly consider seeking advice from your own financial or investment adviser. Data sources are from publicly available outlets and news. Figures may have changed or incorrect, please do your own research.