Institutional solutions to cryptocurrency investing continue to take rise. As client demand increases, another major Wall Street firm is making plans to offer a new array of digital asset trading services.
Morgan Stanley Expands Digital Asset Trading Services
New York-based investment bank Morgan Stanley plans to launch Bitcoin swap trading services for clients, reports Bloomberg.
Through the new trading service, investors will be able to go long or short on Bitcoin price return swaps, giving clients synthetic exposure to the price action of the world’s largest cryptocurrency. Morgan Stanley will charge a spread for each transaction made, according to a person familiar with the matter.
Before launching its proprietary derivatives product, the U.S. investment bank will conduct an internal approval process. The move marks Morgan Stanley’s second cryptocurrency derivative service, as the firm began clearing Bitcoin futures contracts at the start of 2018.
However, Morgan Stanley does not plan to offer direct cryptocurrency trading services to its clients, according to the report. The launch date for the new Bitcoin swap trading service has not been disclosed.
Morgan Stanley ranks sixth among the largest U.S. banks, with over $851 billion in assets under management, according to data from Bankrate.
Kevin Murcko, CEO of crypto exchange CoinMetro noted the effect the swap trading will have on Bitcoin:
“The immediate impact on the price of Bitcoin is likely to be minimal. This is an unofficial announcement of an announcement about a synthetic instrument only loosely tied to Bitcoin’s market value. Nevertheless, it’s worth keeping in mind that in the long term, this is all good for the space. Morgan Stanley’s move bolsters Bitcoin’s growing credibility. The decision will also drive the need for additional regulation and security improvements, as clients will expect to be covered by the same protections offered in more traditional markets.”
The Great Migration: Wall Street to Crypto
To meet rising investor interest, Morgan Stanley is beginning to establish itself in the digital economy. Last month, Morgan Stanley hired Andrew Peel, who previously served as Credit Suisse’s (CS) VP of Sales and Innovative Trading, to head its new Digital Asset Markets division.
Peel’s decision to leave CS is not the first crypto exit the company has seen. In April 2018, former Crypto Asset and Investment Banking unit founder Brian Wirtz left the firm to start the Blockchain Advisory Group.
In the same month, former CS trader Nelson Minier took a job at Kraken, according to eFinancialCareers.
Morgan Stanley’s recent hire follows a series of job postings seeking equity analysts with “knowledge of cryptocurrencies” in early March 2018.
Cover Photo by Andre Benz on Unsplash