Morgan Stanley Aims to Beat UBS as First Bank to Fully Approve Bitcoin ETF

Hassan Shittu

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Morgan Stanley Aims to Beat UBS as First Bank to Fully Approve Bitcoin ETF

The competition among investment banks to be the first to incorporate spot Bitcoin exchange-traded funds (ETFs) in the United States has intensified, with Morgan Stanley and UBS vying for the top spot.

According to crypto insider Andrew AP Abacus, both financial giants are slated to introduce their Bitcoin ETFs next week.

Morgan Stanley and UBS Compete to Approve Bitcoin ETFs on Their Platforms

The assets under management of Morgan Stanley and UBS are worth $1.26 trillion and $1.1 trillion, respectively, which make them among the largest wealth managers globally. Both institutions are aiming to fully approve Bitcoin ETF trading on their platforms, marking a significant moment for the institutional adoption of Bitcoin.

UPDATE: several notes from @MorganStanley execs this AM; salty about @UBS post yesterday. They want to be the first wirehouse to fully approve the #Bitcoin ETF’s.

@MorganStanley may announce a few days before @UBS.
– interesting that global banks are talking about $BTC ETF’s…

— Andrew (@AP_Abacus) April 3, 2024

According to reports from crypto enthusiast Andrew (AP_Abacus) on X, Morgan Stanley is aiming to outpace UBS and become the first wirehouse to fully approve the Bitcoin ETF. 

Andrew cited internal notes from Morgan Stanley, suggesting that the bank may announce its move into Bitcoin ETFs shortly before implementation. This development has stirred discussions among global banks, viewing the addition of Bitcoin ETFs as a competitive race.

However, Bloomberg ETF expert Eric Balchunas, contributing to Andrew’s X thread, disclosed that neither Morgan Stanley nor UBS has yet added Bitcoin ETFs, citing reliable sources. 

Balchunas indicated that both banks are engaged in a compliance standoff, waiting for one to make the first move, which would then pave the way for the other. This situation could potentially lead to a simultaneous adoption of Bitcoin ETFs by both institutions.

Andrew’s latest update follows his previous report that UBS intends to integrate Bitcoin ETFs into its platform between April 8 and April 12.

UPDATE: sources saying that #Bitcoin ETF’s will be added to @UBS platform next week and widely available.

– removal from PWM silo.
– removal of ‘unsolicited’ order restriction.
@UBS manages $3.5T in global wealth.

— Andrew (@AP_Abacus) April 2, 2024

This speculation about Morgan Stanley’s potential rivalry with UBS comes in the wake of earlier reports indicating the bank’s imminent approval of Bitcoin ETFs. Andrew had previously suggested that Morgan Stanley was gearing up to greenlight Bitcoin ETFs within the next two weeks.

Morgan Stanley Eyes BTC ETFs for Brokerage Platform

Morgan Stanley is currently conducting due diligence to potentially add spot Bitcoin ETF products to its brokerage platform, according to sources familiar with the matter. The bank has been evaluating offering these products to clients since the Securities and Exchange Commission approved their introduction in the U.S. in January.

The debut of spot Bitcoin ETFs in the United States on January 11 was a significant milestone after years of efforts to launch such products. However, customers of major banks like UBS and Citi encountered difficulties accessing spot Bitcoin ETFs, with each bank providing different reasons for not listing these investment products.

While billions of dollars have already been invested in Bitcoin ETFs, the floodgates of investment might not fully open until these products are offered by major registered investment advisor (RIA) networks and broker-dealer platforms associated with firms like Merrill Lynch, Morgan Stanley, Wells Fargo, and others.

For instance, UBS stated that spot Bitcoin ETFs could only be offered in brokerage accounts and were suitable solely for “aggressive investors.” The bank also emphasized the importance of issuers demonstrating their ability to manage the product effectively, particularly during volatile market conditions.

There are currently 10 spot Bitcoin ETFs trading in the U.S., with the most assets held by products like Grayscale’s GBTC, BlackRock’s IBIT, and Fidelity’s FBTC. It remains unclear which ones Morgan Stanley is considering offering to its clients.

The potential approval of Bitcoin ETFs by major wealth managers like Morgan Stanley could signify a pivotal moment for the cryptocurrency. If granted, it would signal a growing confidence in Bitcoin’s long-term viability and expose millions of new investors to the market.

Furthermore, being at the forefront of Bitcoin ETFs could attract billions in new client assets for these banks, reflecting increasing confidence in Bitcoin’s future among the global banking elite.

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