Morgan Stanley has dropped long-standing restrictions on which wealth management clients can invest in cryptocurrency funds, expanding access across its $8.2 trillion platform.
Starting October 15, financial advisors will be able to offer bitcoin and cryptocurrency funds to any client — including those with retirement accounts — according to the report. Preparing reports By CNBC.
So far, only investors with assets of more than $1.5 million and a significant risk profile can participate. In other words, Morgan Stanley will soon allow all wealth management clients, including those with retirement accounts, to invest in cryptocurrencies. There is no cap on required assets.
The move represents a major shift in policy for the world’s largest wealth manager and reflects Wall Street’s accelerating embrace of digital assets since President Donald Trump’s administration took a friendlier stance toward cryptocurrencies.
This follows Morgan Stanley’s recent plan to enable trading of Bitcoin and other cryptocurrencies on its e-commerce platform. To manage risk, the company will use automated systems to ensure customers are not overly exposed to cryptocurrencies, CNBC reported.
Morgan Stanley acquired ETRADE in an all-stock deal worth approximately $13 billion in 2020.
Bitcoin allocation up to 4%
Its investment committee advises clients to allocate a maximum of up to 4% to Bitcoin and other cryptocurrencies, depending on individual goals. The bank’s latest report describes Bitcoin as “digital gold” and a legitimate real asset, noting its increasing maturity despite ongoing volatility.
Morgan Stanley said clients should rebalance their multi-asset portfolios on a regular basis — ideally every quarter, or at least once a year.
“This rebalancing will reduce the potential for positions to swell, which could mean significant volatility at the portfolio level and contribute to crypto risk in periods of macro and market stress,” the report states.
The report recommended gaining exposure through exchange-traded products to manage volatility and prevent portfolio distortion during strong uptrends.
This approach indicates a thoughtful but open attitude toward integrating cryptocurrencies within traditional investment frameworks. This news is consistent with Bitcoin reaching higher and higher levels.
On August 7, President Trump signed an executive order expanding investment options in retirement plans under ERISA. It directs federal agencies to make it easier for 401(k) and 403(b) plans to include alternative assets such as cryptocurrencies, private equity and real estate when deemed appropriate by fiduciaries.
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