Morgan Stanley already tells clients to consider a 2% to 4% Bitcoin allocation, but many of its own advisers still have catching up to do.
Important to Know
- Morgan Stanley sees stronger client demand for Bitcoin.
- Around 80% of MSBT exposure comes from self-directed clients.
- Large banks still need clearer rules before holding Bitcoin directly.
Wall Street Clients Are Not Waiting
The clearest signal inside Morgan Stanley is not coming from advisers. It is coming from clients who trade on their own.
MSBT, the Bitcoin ETP from Morgan Stanley, uses Coinbase and BNY Mellon as custodians. A custodian holds assets safely on behalf of clients, which helps large financial firms offer Bitcoin exposure without handling every storage detail themselves.
Yet during the first week, every dollar of MSBT inflows came from self-directed investors. Morgan Stanley advisers had not yet offered the product to clients. Today, around 80% of MSBT exposure still comes from clients who make their own trades.
Amy Oldenburg, head of digital asset strategy at Morgan Stanley, said at the Bitcoin Conference in Las Vegas that adviser education remains one reason for the gap. Morgan Stanley has started internal training programs to help advisers understand Bitcoin better.
At the same time, the bank is preparing for deeper crypto access. Morgan Stanley is working on an OCC digital trust charter, which could allow it to custody crypto directly and offer spot crypto trading through its wealth platform. Spot trading means buying or selling Bitcoin at the current market price.
Oldenburg also said major U.S. banks may eventually hold Bitcoin on their own balance sheets. Still, rules have not caught up. She said regulators still need to move in the same direction before major banks can hold Bitcoin directly, including the Federal Reserve, Basel rulemakers, and other global watchdogs.
So, client demand is already moving. Bank balance sheets are not there yet.
Regulated Bitcoin products also keep pulling in money across Wall Street. BlackRock’s IBIT ETF, launched in January 2024, has grown into the fastest growing ETF ever, with more than $61 billion in assets and over 800,000 Bitcoin under management.
For newer Bitcoin buyers, the takeaway is clear enough. Big banks now offer more ways to get Bitcoin exposure, but full adoption inside those banks still depends on adviser training, custody rules, and clearer guidance from regulators.