Morgan Stanley Invests in Grayscale GBTC

Many bitcoin users stand in opposition to large banks. One of the largest, Morgan Stanley, has recently stepped into the bitcoin market.

According to SEC filings from Morgan Stanley, the bank has purchased over 6.5 million shares of the Grayscale Bitcoin Trust across more than a dozen funds. With each share trading at $37.82, this amounts to approximately $240 million in GBTC. This would make the investment bank the second-largest known owner of GBTC after ARK Investment Management’s Cathie Wood, who owns over 9 million shares.

While many investment funds and asset managers own GBTC, investment banks, which control larger amounts of cash, have not stayed away. Morgan Stanley first entered the market just a few months ago when it showed in an SEC filing that it had purchased 28,000 shares of GBTC for its Europe Opportunity fund. This latest round of investment, for the reporting period ending June 30, far exceeds that number.

The Grayscale Bitcoin Trust is an investment vehicle for institutions and individuals who want exposure to bitcoin in their portfolios but do not actually want to hold or manage private keys. As such, GBTC operates by tracking the price of bitcoin. To enter, investors must invest at least $50,000, pay a 2% fee, and hold their shares for at least six months before they can resell them.

GBTC often trades at much higher or lower prices than the digital asset it is designed to track. According to data from YCharts, it is currently trading at a 13% discount. Since March, investors have been able to buy GBTC at a lower price than bitcoin was trading, which is a byproduct of the six-month holding period.

Nevertheless, the fund has managed to accumulate over $31 billion in assets under management, not counting an additional $9 billion in other crypto trusts. Morgan Stanley’s shares are allocated across a range of mutual funds, which are essentially pools of money that are divided between investments in securities such as stocks and bonds. However, including Grayscale in mutual funds will not send investors’ retirement accounts (IRAs) to the ‘Moon’. For example, GBTC shares in the Insight fund make up only 0.34% of the portfolio.

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