2021-03-18 21:37:22

Banks turning to cryptocurrency to lure investors

Morgan Stanley, the fourth-biggest investment bank in the world, is reportedly planning to offer some of its wealthier clients exposure to Bitcoin through three cryptocurrency funds.

“When institutions start to take notice,” MJP Wealth Advisors President Brian Vendig said, “It starts to create a validation process that plays out.”

And for this first of the planet’s largest banks, one managing $4 trillion, to allow its clients access to crypto, Vendig expects it means its competitors might soon offer similar investment opportunities.

“Knowing that the financial services industry is very competitive,” he said, “it wouldn’t surprise me that moving forward, access to this asset class is more prevalent in the financial services industry.”

On the same day we learned of Morgan Stanley planning to offer investment opportunities in Bitcoin funds, Cash App announced the end of Bitcoin transaction fees, allowing its users to exchange BTC like a fiat currency.

“Currently today, cryptocurrency is an alternative investment,” Vendig said. “It doesn’t have a productive use in a pervasive way like traditional currencies do.”

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But in the last few years, Vendig has fielded more and more questions from clients about cryptocurrencies: How they work, where one acquires some, and whether or not one ought to consider doing so.

“Year over year,” Vendig said, “there has definitely been more of a curiosity, more of an interest to try and understand what are the different ways to invest in either blockchain or in crypto.”

And as crypto and the blockchain continue to evolve and mature to offer a combination of investment vehicles appropriately regulated to educate and protect retail investors, Vendig expects more and more clients to ask themselves and their financial advisors whether they too ought to get involved.

“Could this be a unit of value where I want to allocate some of my investment dollars?” Vendig said.

A Morgan Stanley spokeswoman declined to comment for this story.

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