Chalk up another financial giant quietly entering cryptocurrency. One of the most respected and largest investment banks is quietly building a product that will allow its clients to indirectly trade bitcoin. Citing an unnamed individual familiar with the matter, Bloomberg reports that Morgan Stanley, the sixth-largest investment bank in the U.S. by assets, is currently creating a proprietary derivatives product that’ll give traders “synthetic exposure” to the price of Bit coin.
From the report: “The U.S. bank will deal in contracts that give investors synthetic exposure to the performance of Bitcoin, said the person, who asked not to be identified because the information is private. Investors will be able to go long or short using the so-called price return swaps, and Morgan Stanley will charge a spread for each transaction, the person said.”
The report from Bloomberg further stated that Morgan Stanley’s CEO, James Gorman, said earlier in 2018 that the firm would not let clients trade crypto currency directly through the financial institution, but is nevertheless “technically prepared” to start offering bitcoin swaps, pending the conclusion of an internal approval procedure and demand from institutional shareholders. Could the internal approval procedures and demand be catching up to Morgan Stanley?
Morgan Stanley joins an ever-growing number of major banking institutions who have considered, are considering, or will consider how best to incorporate crypto-currencies into their institutional product offerings. Morgan Stanley now joins Goldman Sachs and Citigroup, both a top 5 bank in the United States, in discovering ways to offer their clients bitcoin derivatives products. JPMorgan, the parent holding company of Chase (Commercial Bank), has allegedly also begun investigating ways to help its clients purchase cryptocurrency, despite the fact that CEO Jamie Dimon has been one of Bit-coin’s most outspoken critics.
Meanwhile, the Intercontinental Exchange (ICE), the operator of the world’s largest stock exchange, will, very shortly, launch the very first physically-delivered Bitcoin futures product, meaning that contracts will be settled with actual BTC as opposed to fiat (as is the case with Bit coin futures currently offered on Chicago-based exchanges CME and CBOE).
All of this points to fantastic news. This development by financial institutions to offer cryptocurrency based products for their clients is just another push towards mass adoption, as we here at Cryptotraderspro have talked about numerous times. Will actions like these continue to push for adoption and acceptance by the SEC? Will this legitimize cryptocurrencies by the time Nasdaq lists cryptocurrencies by Q2 of 2019 as discussed here? Will financial institutions in countries looking to adopt and regulate cryptocurrency like India look to the actions taken by Morgan Stanley as a model for their own country’s financial institutions?
Will that lead to increased mass adoption? What are your thoughts?
Follow us on Facebook by clicking here
