Morgan Stanley backs Bitcoin for 12 mutual funds
EXPLICA .CO, 02 April 2021
US investment bank Morgan Stanley has filed an update to its prospectus related to bitcoin (BTC) with the Securities and Exchange Commission (SEC). The institution applied for 12 of its funds to have exposure with the first cryptocurrency.
According to the bank, the funds would have indirect exposure to bitcoin in two ways: through cash-settled futures and through the Grayscale Bitcoin Trust (GBTC), one of the world’s largest trusts focused on digital assets.
On the type of futures that funds can invest in, Morgan Stanley noted: “The only bitcoin futures that a fund can invest in are cash-settled bitcoin futures that are traded on listed futures exchanges. CFTC ‘.
In the document, the bank explains that the Selected funds will be able to invest up to 25% of their assets in bitcoin. The institution also stressed that this type of operation implies a risk of illiquidity since bitcoin futures are not traded so “intensely” because they are relatively new.
The funds that would be authorized by the SEC are: Advantage Portfolio, Asia Opportunity, Counterpoint Global, Developing Opportunity, Global Advantage, Global Permanence and Global Opportunity. Morgan Stanley is also seeking authorization for the Growth, Inception, International Advantage, International Opportunity funds and the Permanence portfolio. On its website, the bank lists almost 50 investment funds.
Morgan Stanley’s move is framed within its “investment policies and strategies” for other types of securities, which includes bitcoin as the main cryptocurrency. However, the bank warned that fraud and market manipulation can affect bitcoin futures as it could increase their volatility.
