The US SEC filings published on Wednesday, August 25, indicate that Morgan Stanley, the world’s third-largest bank, has increased its indirect exposure to Bitcoin by buying more than one million Grayscale Bitcoin Trust shares, currently worth around $40 million.
A Twitter user named “Macroscope,” a financial analyst, was the first one to notice the Morgan Stanley holdings.
The SEC filings show that the bank owns huge amounts of Grayscale Bitcoin Trust shares across over 30 Morgan Stanley funds. The Morgan Stanley Insight Fund (an equity growth fund that manages $8 billion in assets) is the biggest portfolio, with 928,051 Grayscale Bitcoin Shares worth about $36 million. The bank also holds huge amounts of Grayscale Bitcoin (GBTC) in its Morgan Stanley Institutional Fund Inc, the Morgan Stanley Institutional Trust, the Morgan Stanley Variable Insurance Fund, and others.
Morgan Stanley purchased the GBTC shares in June when Bitcoin plunged its value at around $30,000, and GBTC shares declined to the level of $30 each.
Grayscale Bitcoin Trust is an investment product for people who want exposure to Bitcoin in their portfolios but don’t want to hold or manage the physical Bitcoin. As such, GBTC operates by tracking the price of Bitcoin. Those who are investing in GBTC are indirectly investing in Bitcoin since the product reflects the price performance of Bitcoin. GBTC is a US-based digital asset fund that has attracted attention from high-profile investors such as Cathie Wood.
So far, Morgan Stanley has bought more than 6.5 million shares of Grayscale Bitcoin Trust across several of its dozen funds. This makes the bank the second-largest holder of GBTC after Cathie Wood’s ARK Investment management firm owns over 9 million shares.
Investing in Crypto Firms
Morgan Stanley has been increasingly active in the crypto landscape in recent months to meet the rising demand from its clients. The US-based bank has been increasingly interested in investing in companies with crypto interests.
Although the bank has not publicly revealed a direct investment in cryptocurrencies, like purchasing Bitcoin itself, it has consistently invested huge chunks of funds in crypto-related companies.
In January, Morgan Stanley invested $500 million in MicroStrategy – the public company that holds the largest amounts of Bitcoins on the balance sheets – to gain more exposure to the digital asset.
In March, Morgan Stanley became the first US bank to provide its clients with access to Bitcoin funds. The bank succumbed to its client demands to offers such services, and the offering allows eligible clients to access three Bitcoin funds, including two funds from Galaxy Digital, a crypto firm run by Bitcoin bull Mike Novogratz, and the other fund from a joint effort from Bitcoin company NYDIG and asset manager FS Investments.
In June, Morgan Stanley revealed that it bought 28,289 GBTC shares worth $1.3 million through its Europe Opportunity Fund, though that was a relatively small investment compared with today’s filings.
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