US funding financial institution Morgan Stanley could also be positioning itself in order that even when its newly introduced spot Bitcoin exchange-traded fund (ETF) underperforms, it’ll nonetheless ship strategic advantages throughout the agency, based on ProCap chief funding officer Jeff Park.
“Morgan Stanley is making the wager that even when their ETF does not scale to blockbuster success, there’s an intangible profit that may assist construct their clout,” Park said on Wednesday.
It comes only a day after Morgan Stanley filed with the US Securities and Trade Fee to launch two ETFs, one tied to Bitcoin (BTC) and the opposite to Solana (SOL).
Crypto market “a lot larger” than believed
Park mentioned that irrespective of how important the inflows are for Morgan Stanley’s new merchandise, the transfer will deliver social, reputational, and monetary advantages.
He pointed to Morgan Stanley’s “targeted consideration” on monetizing its brokerage subsidiary ETRADE by means of crypto buying and selling and tokenization partnerships.
“This turns into particularly extra related as a constructive externality if it helps recruit prime expertise vs rivals,” Park mentioned.
Park mentioned the announcement reveals that the crypto market is “a lot larger” than crypto business professionals anticipated. “Particularly to achieve new clients,” he mentioned.
He additionally argued that one other issue past efficiency is the reputational edge the spot Bitcoin ETF offers the agency by making it look pro-Bitcoin.
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“It is because each asset supervisor is aware of that having a Bitcoin ETF communicates that they’re ahead pondering, younger, and slightly edgy,” Park mentioned.
“Others may comply with,” says an ETF analyst
Morningstar ETF analyst Bryan Armour told Reuters on Tuesday that Morgan Stanley’s sudden transfer into crypto could imply it needs to “transfer purchasers that put money into Bitcoin into their ETFs, which may give them a quick begin regardless of their late entrance.”
“A financial institution getting into the crypto ETF market provides legitimacy to it, and others may comply with,” Armour mentioned.
Morgan Stanley is taken into account one of many world’s prime three funding banks, alongside Goldman Sachs and JPMorgan. Whereas the opposite two corporations have crypto funding ties, neither provides its personal crypto ETF.
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