In the latest move by a traditional finance player recognizing bitcoin as an asset class, banking and investing giant Morgan Stanley this week said it’s going to offer wealthy clients access to three funds that will enable exposure to bitcoin.

Why should we care?
Morgan Stanley is the first major bank to offer clients funds with exposure to bitcoin. Access will be restricted to clients with an “aggressive risk tolerance” and at least $2M in assets, and bitcoin investments will be limited to 2.5% of clients’ net worth. Two of the funds offered are through Galaxy Digital, and the other is a joint effort from asset manager FS Investments and bitcoin tech and financial services firm NYDIG. Morgan Stanley joins a group of large financial firms looking to address demand for digital assets, though wealth management units of Goldman Sachs, JPMorgan Chase, and Bank of America don’t yet permit advisers to offer direct bitcoin investments. A recent investor note from Morgan Stanley’s wealth management division recommended that investors consider how and whether to get exposure to this “burgeoning asset class.” The note, however, stops short of recommending direct exposure in the form of owning a particular coin. “Coin trading remains in its infancy. Issues around finding true price discovery and best execution are still to be addressed. We have yet to be convinced there and, therefore, advise clients to proceed with caution.”