Morgan Stanley More Interested In Crypto as Regulatory Winds Shift

Wall Street giant Morgan Stanley is exploring expanding its involvement in the cryptocurrency market. This potential shift in its approach to the space comes amid an evolving regulatory landscape under Donald Trump’s administration.

Speaking at the World Economic Forum on Thursday, Morgan Stanley CEO Ted Pick addressed the possibility of increased engagement with cryptocurrencies, particularly in light of recent developments, including the acting head of the U.S. Securities and Exchange Commission’s initiative to establish a regulatory framework for the asset class.

Speaking to CNBC in Davos, Pick pointed out that for the firm the question is whether it can act as a transactor, before adding Morgan Stanley will be “working with Treasury and other regulators to figure out how we can offer that in a safe way.”

Morgan Stanley has previously taken a relatively proactive stance on cryptocurrency, becoming the first major U.S. bank to offer Bitcoin (BTC) funds to high-net-worth clients in 2021 and subsequently leading the way in offering Bitcoin exchange-traded funds.

However, stricter regulations under the Biden administration limited banks’ direct involvement in the asset class, restricting trading desks to Bitcoin derivatives and prohibiting ownership of the underlying asset. The firm has resorted to allowing brokers to recommend Bitcoin ETFs.

Bitcoin’s Resilience Shines Through to Morgan Stanley

Pick suggested that Bitcoin’s resilience through market volatility and industry scandals could be a significant factor in its long-term viability. With Bitcoin still trading above $100,000, he raised the question of whether the cryptocurrency has “come of age” and “whether it’s hit escape velocity.”

It’s worth noting that last year Morgan Stanley revealed a near $270 million investment into Grayscale’s Bitcoin exchange-traded fund. Bitcoin was then trading around the $60,000 mark, meaning the bank’s investment should now be worth around $440 million.

Pick’s comments come as other banking leaders also express a willingness to engage with cryptocurrencies should regulations allow. Bank of America Chief Executive Brian Moynihan signaled a similar openness this week, suggesting that cryptocurrencies could become another form of retail payment for the bank’s customers.