- Morgan Stanley is considering enabling its 15,000 advisors to recommend Spot Bitcoin ETFs directly to clients, broadening investor access.
- Although client interest in Bitcoin ETFs is high, investments are cautious and moderate, not comprising major financial commitments.
- This policy shift could reverse the recent trend of declining inflows into these ETFs, offering a timely boost to the cryptocurrency sector.
Demand for Spot Bitcoin ETFs could soon surge as Morgan Stanley may soon let its 15,000 advisors directly recommend these ETFs to their clients, two senior executives close to the matter said, according to AdvisorHub.
While the multinational investment bank has been allowing access to the ETFs since approval, they have only done so if clients approached them directly. The move would see the brokers pitch the products directly to customers, potentially giving Bitcoin exposure to a whole new range of investors.
Related: US ETFs Record Two Weeks of Net Outflows Amid Gloomy Economic Forecast
According to one executive, Morgan Stanley is still considering how to go about soliciting the fund purchases, including risk management, risk tolerance, trading frequency and allocation limits.
The unnamed executives told AdvisorHub:
“We’re going to make sure that we’re very careful about it. We are going to make sure everybody has access to it. We just want to do it in a controlled way.”
Although there is ‘strong interest’ in these products, the executives are reportedly downplaying the extent of it:
“Our clients aren’t betting the ranch on Bitcoin. For most of those people, it’s quite interesting, so they put in a little bit of money.”
Initiative Could Boost Dwindling ETF Flows
Despite Morgan Stanley declining requests for comments, this is welcome news for the funds amid what appears to be a cooling off of inflows.
Data from Farside Investors shows that, despite Monday’s positive flows, the ETFs experienced net outflows far greater during the rest of the week.
Interestingly, the star of the funds, BlackRock’s IIBIT, has seen zero net flows for the first time ever on Wednesday.
The fund had consistently outperformed the rest of funds so far, taking in a record US$15bn (AU$23bn) in the first three months of trading, shattering records for newly established ETFs.
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Meanwhile, it looks like the Spot Ethereum ETFs are going to be heading for a denial next month. Sources said the US watchdog is going to deny a whole host of applications in May. On the other side of the world, Hong Kong’s regulator has just given the green light for both Bitcoin and Ethereum Spot ETFs, set to commence trading 30 April.
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