Morgan Stanley to Offer Access to Bitcoin Funds

Hello as always, and welcome to today’s edition of Overbit Weekly Round Up. With just under two weeks left in March, we are now close to rounding off the first quarter of 2021. With a constant stream of activity in the markets, it isn’t easy to keep perspective on more significant, more zoomed-out storylines and narratives. We’ll jump right in to do just that.

Our first story of the day is yet another entry in the litany of institutional clients swarming towards investing in and adopting Bitcoin. This time, the institution takes the form of the US banking giant Morgan Stanley.

According to reports, Morgan Stanley published an internal memo for its investors that it would be rolling out “three funds that enable ownership of bitcoin” according to CNBC. Unfortunately, these funds will only be available to Morgan Stanley’s ‘wealthier clients’: those with aggressive risk tolerance and at least $2 million in assets held by the bank. On top of that, Morgan Stanley will only allow a client to invest 2.5% of their total holdings into the Bitcoin market.

Though it’s certainly not as inclusive as one might hope, it’s still QUITE a long way from the same Morgan Stanley whose analysts said ‘the value would be 0’ in regards to Bitcoin, just a few weeks before the parabolic break in 2018.

This is undoubtedly a sign of the changing times, though reports indicate that it may have been Morgan Stanley’s clients who actually prompted the move rather than a decision made by the bank itself. According to CNBC reports, Bitcoin’s rally in the past year has ‘put pressure’ on many investors and firms to increase their exposure to the brand-new asset class. Some of the biggest winners in this deal are Galaxy Digital, NYDIG and FS Investments. Galaxy Digital offers the first two funds, and the third being a joint offering from NYDIG and FS Investments.

It will be interesting to see how US banks’ adoption continues, as Morgan Stanley is now in a class of its own with bitcoin offerings, making it separate from the other financial giants like Goldman Sachs, JPMorgan Chase, and Bank of America. As time goes on, we imagine this pressure that Morgan Stanley felt will only continue to grow in magnitude for the ones left behind.

Moving away from cryptocurrency markets, top Federal Reserve officials reported in a new study that the unemployment rate is expected to be 4.5 per cent this year, down from a previously estimated 5 per cent.

In addition, the median expectation for GDP growth this year increased to 6.5 per cent from 4.2 per cent in December, when they last disclosed predictions, and these bullish economic signals on potential economic recovery contributed to a rise in US stocks following the survey.

However, Fed officials now expect inflation to average 2.2 per cent, up from 1.8 per cent in December, raising worries about the long-term value of the US dollar. Concerns regarding the US dollar are exacerbated because the Fed funds rate is projected to remain close to zero until at least 2023.

While central banks of the world continue to keep interest rates low, to recover after covid, many in the crypto markets are continuing to look at Bitcoin as an opt-out into “Hard Money”. Thank you as always for reading‘s Weekly Round Up; we’ll be sure to keep you informed of the top market news stories every week.

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