Morgan Stanley, the world’s third-largest bank, has expanded its indirect exposure to Bitcoin by purchasing more than one million Grayscale Bitcoin Trust shares, now worth about $40 million, according to US SEC filings issued on Wednesday, August 25.
The Morgan Stanley holdings were originally noticed by a Twitter user dubbed “Macroscope,” a financial expert.
According to SEC filings, Morgan Stanley has many Grayscale Bitcoin Trust shares spread among over 30 Morgan Stanley funds. With 928,051 Grayscale Bitcoin Shares worth roughly $36 million, the Morgan Stanley Insight Fund (an equities growth fund with $8 billion in assets) has the largest holding. In addition, Morgan Stanley Institutional Fund Inc, Morgan Stanley Institutional Trust, Morgan Stanley Variable Insurance Fund, and others all own large quantities of Grayscale Bitcoin (GBTC).
In June, Morgan Stanley bought GBTC shares when Bitcoin’s value plummeted to approximately $30,000, and GBTC shares fell to around $30 apiece.
Grayscale Bitcoin Trust is an investment product for those who want to include Bitcoin in their portfolios but don’t want to own or manage the actual currency. As a result, GBTC is based on the price of Bitcoin. Thus, those who invest in GBTC are indirectly investing in Bitcoin because the product tracks the cryptocurrency’s price. GBTC is a digital asset fund headquartered in the United States that has garnered the attention of high-profile investors such as Cathie Wood.
Morgan Stanley has purchased about 6.5 million shares of Grayscale Bitcoin Trust through many of its dozen vehicles thus far. After Cathie Wood’s ARK Investment management business, which holds over 9 million shares, the bank becomes the second-largest holder of GBTC.
Investing in Cryptocurrency Companies
Morgan Stanley has become more engaged in the crypto space in recent months to fulfill increased customer demand. The bank, located in the United States, has been increasingly interested in investing in crypto-related businesses. Even though the bank has not officially disclosed a direct investment in cryptocurrencies, such as buying Bitcoin, it has continuously spent large sums of money in crypto-related businesses.
Morgan Stanley bought $500 million in MicroStrategy in January to get greater exposure to the digital asset. MicroStrategy is the public business with the highest number of Bitcoins on its balance sheets.
Morgan Stanley became the first US bank to provide its customers access to Bitcoin funds in March. The bank gave in to client requests and now provides three Bitcoin funds, including two from Galaxy Digital, a crypto business founded by Bitcoin bull Mike Novogratz, and one from a collaborative venture between Bitcoin startup NYDIG and asset management FS Investments.
Morgan Stanley disclosed in June that it had purchased 28,289 GBTC shares for $1.3 million through its Europe Opportunity Fund, albeit this was a minor investment compared to today’s disclosures.