: Morgan Stanley set to offer wealthy clients access to bitcoin funds: report

United States

Morgan Stanley is set to offer wealthy clients the ability to invest in bitcoin funds, making it the first major U.S. bank to do so, CNBC reported on Wednesday.

The investment bank MS, +1.15% told financial advisers in an internal memo that it would provide wealth-management clients access to three bitcoin-related funds, according to the report, which cited people with direct knowledge of the matter. Morgan Stanley declined to comment on the report.

Bitcoin bulls have argued that wider institutional and commercial acceptance of cryptocurrencies would justify a continued run-up in the price of the volatile digital asset, which hit an all-time high above $ 60,000 last weekend. Bitcoin BTCUSD, +1.82% was lower in morning trade, following the report, but surged to the upside in afternoon action, getting a lift as stocks rallied — and the dollar fell — after the Federal Reserve and Chairman Jerome Powell struck a dovish tone at the conclusion of a two-day policy meeting. Bitcoin was up 2.2% to $ 57,615 in late afternoon activity.

The report said two of the funds on offer are from Galaxy Digital, a crypto firm founded by veteran hedge-fund manager Michael Novograts; the third is a joint effort by asset manager FS Investments and bitcoin company NYDIG.

Bitcoin’s detractors maintain that so-called cryptocurrencies remain largely a bubble phenomenon. Volatile price swings make them impractical to use as a currency or store of value.

Proponents have long argued the digital assets are a hedge against debasement of fiat currencies and that the underlying blockchain technology carries tremendous appeal in terms of confidentiality and round-the-clock access.

And bitcoin bulls have cheered rising institutional interest from the likes of Tesla Inc. TSLA, +2.84%

More broadly, the rise of bitcoin has been tied to gaining institutional interest from the likes of Tesla Inc. TSLA, -1.82%, which earlier this year put $ 1.5 billion of cash in bitcoins.

PayPal Holdings Inc. PYPL, +1.22% in November opened up its cryptocurrency platform to all U.S. customers after conducting a more narrow rollout. And several high-profile Wall Street players, including Stanley Druckenmiller and Paul Tudor Jones have embraced bitcoin. And some skeptics, such as Oaktree Capital Management’s Howard Marks, have softened their tone, acknowledging that the jury is out on bitcoin’s long-term viability.