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Morgan Stanley Buys E*Trade for 13 Billion USD, Providing Link For Everyday Online Traders

Wall Street giant Morgan Stanley is creating more access for everyday investors with the announcement of an imminent $13 billion acquisition of online trading firm E*Trade Financial Group on Feb. 20.

According to an articlein the New York Times, this is the biggest takeover by a major American financial institution since the global financial crisis of 2008 and gives Morgan Stanley access to an additional 5.2 million customers in the online trading market and $360 billion in assets.

After the takeover, E*Trade’s CEO, Michael Pizzi will hold his position, and the company will maintain its current branding and advertising.

Linking Crypto Trade and Wall Street

While the deal demonstrates a growing willingness of major Wall Street players to tap into the everyday investor market, it could also spell bigger things for cryptocurrency mainstream and institutional adoption.

Last year, Bloomberg reportedthat E*Trade was on the verge of offering digital asset trading on its platform. The online brokerage firm had announced that Bitcoin and Ether would be available soon with other cryptocurrencies to follow.

In 2018, Morgan Stanley had attempted to launch institutional swaps tracking Bitcoin futures but received no orders. The financial giant maintains that it is ready to offer the product as soon as the market is ready according to an articlepublished Dec. 23, 2018, by Bloomberg.

Further Institutional Adoption

Despite the failed 2018 attempt to by Morgan Stanley and Goldman Sachs to entice Wall Street to invest in crypto products, new research by Van Eck has revealed that even a small amount of BTC allocation could improve a portfolio’s upside.

As covered by Blockchain.News, VanEck recently outlined the case for institutional Bitcoin (BTC) investment in a report published on Jan. 29.

As shown in the report, Bitcoin has a history of outperforming traditional asset classes as well as a track record of strong growth over longer three to five year periods. Bitcoin also enhances the diversity of a portfolio as its movements bear very little correlation to the broad market equity indices, bonds, and gold.

The report found, “A small allocation to Bitcoin significantly enhanced the cumulative return of a 60% equity and 40% bonds portfolio allocation mix while only minimally impacting its volatility.”

Despite the evidence presented, VanEck’s report explains that the main deterrent for institutional adoption Bitcoin revolves around the lack of infrastructure to connect it to capital markets and its nature as a bearer asset.

VanEck explains that BTC is not quite a currency but still has the potential to become one. The report also suggests Bitcoin bears the necessary features that could see it become digital gold, but its future monetary value hinges heavily on how people’s perceptions of its value develop.

Image via Shutterstock

Bitcoin Price Will Hit $20,000 in 2020? Not Even Close Says Peter Schiff

Bitcoin has been having a good year and a very strong price showing since the Black Thursday stock market crash in March.

Since the COVID stock market crash on March 14, there has been a focus on the price of gold as the traditional store of value with the precious metal gaining over 15% since the dip. Bitcoin has gained more than 150% since March, after dipping below 4k recovering to its pre-crash levels faster than almost any other asset.

Bitcoin’s Safe Haven and $20, 000 Price

In Bloomberg’s Crypto Outlook April 2020 report, Bitcoin’s transformation into a safe haven asset like gold was said to have been accelerated by the coronavirus disruption. Taking into account that Bitcoin’s on-chain indicators are remaining price supportive, the report reveals that the coronavirus appears to be accelerating Bitcoin’s performance much more than the broad cryptocurrency market.

In their June report, Bloomberg predicted that Bitcoin’s price in 2020 could reach double of last year’s high of $14,000.

Despite these predictions and increased reporting of institutional adoption and even rumors that PayPal will begin offering Bitcoin sales to its 300 million users—investor Peter Schiff says an all-time high will be achieved by gold and he asserts Bitcoin won’t even come close to hitting a new high.

Peter Schiff Predicts Gold Not Bitcoin ATH

Over the past few months, Gold the price of gold has surged but it appears to be a combination of central-banks stocking up on the asset and investors reactions the money printing policies of the Federal Reserve and ECB to stimulate the economy.

One Twitter user directed his comments to gold-advocate Schiff, they said, “Since gold peaked over 8 years ago, its price today is back to that level, while the price of #Bitcoin has risen by over 150,000%. So which one of you has been wrong over the past 8 years? Bitcoin is in a bull market and headed much higher, yet you remain in denial.”

On June 28, Schiff replied, he tweeted, “I’m just talking about the last 2.5 years. I was wrong not to buy Bitcoin 8 years ago, but anyone still holding it was wrong not to sell it 2.5 years ago. #Gold will likely make a new all-time high in 2020. BTC won’t even come close.”

This time Schiff is not alone in his Gold price prediction. The CIO of Morgan Stanley Wealth Management, Lisa Shalett, also recently made the case that the US dollar may be reaching a peak and argued that gold should perform under such conditions. Shalet said: “The dollar may be near a peak,” she continued “If the dollar weakens, this may be a good time for certain investors to consider adding some gold to their portfolios.”

Morgan Stanley Chose This Year’s Best Safe Haven Asset—It’s Not Bitcoin

With the coronavirus pandemic being a catalyst to the cryptocurrency industry, Bitcoin has seen short-lived bull runs recently. The pandemic has led to an era of contactless payment, with cryptocurrency touted to be a potential safe-haven asset against inflation caused by stimulus-provoked money printing seen around the world. It seems Morgan Stanley has not hopped on the cryptocurrency bandwagon yet.

However, Morgan Stanley has opposing views, supporting the greenback. The US Dollar fell to a 27-month low this week against the world’s other currencies, where the dollar index reached 92.477, a level not seen since 2018 when investors were more risk-taking. The S&P 500 has also seen a new all-time high after regaining its losses since the emergence of the coronavirus. Backing the world’s reserve currency, Morgan Stanley analysts wrote:

“We expect the US dollar (USD) to be the best safe-haven currency, especially now that lower US rates make it a more attractive funding currency for carry trades.”

The analysts said they keep a “bearish skew” on the dollar, and said that they expect risk sentiment should remain supported for now. Other currency strategists are worried that the current political uncertainties in the US are hurting the dollar. Boris Schlossberg, managing director at BK Asset Management said:

“The longer the stalemate in DC remains in place the greater the danger that the dollar selloff can turn into a rout.”

Japanese yen and Swiss franc dynamics are shifting

The Morgan Stanley analysts said that although the Japanese yen and the Swiss franc remain safe havens, their dynamics are shifting. They were quoted saying that the recent correlation and flows analysis suggests that the trading pair USD/ JPY could even rally in times of investor fears, counter to market perception.

Morgan Stanley concluded that the yen and the Swiss franc remain relatively safe bets, but the investment bank chose the US dollar as the best safe-haven asset in 2020.

US dollar could crash against foreign currencies, Bitcoin could benefit

Not everyone is bullish on the greenback.

Stephen Roach, former Chairman of Morgan Stanley’s Asia division and Yale University senior fellow said that cryptocurrencies including Bitcoin should benefit from the US dollar’s potential 35% crash.

Roach said that the US dollar could crash by 35 percent against foreign currencies, arising from bullish outlooks of the Chinese yuan and euro. China and the eurozone account for 40 percent of US trade, and the US dollar would not crash unless these two currencies see a significant rise.

Roach highlighted that cryptocurrencies and gold should benefit from dollar weakness. Although the markets are currently too small to absorb major movements in the foreign exchange markets.

US dollar’s role as a global reserve currency on edge, arguments for gold

While Bitcoin has been accelerating to become a new kind of digital gold, the yellow metal has recently seen its own rally, reaching past the record $2,000 mark. In addition to the crypto market rally, gold has gained momentum as investors are debating the prospects of another stimulus payout in the US, and increased geopolitical risks.

The record high in gold prices is raising questions regarding the US dollar’s future as the world’s reserve currency.

Goldman Sachs investment bank has said that the US dollar risks losing its position as the world’s global reserve currency, as revealed by the recent surge in gold prices. Goldman Sachs analysts wrote in a note to clients that gold would be the currency of the last resort, especially in the current environment where governments are debasing their fiat currencies.

Goldman Sachs expects $2,300 an ounce for gold’s price within the next 12 months. The investment bank also lifted its silver outlook from $22 to $30.

Bitcoin Soars To New ATH, With the News That Morgan Stanley Set to Bet Big on BTC

The first-ever digital currency, Bitcoin (BTC), has soared to a new all-time high (ATH) at $49,125.11 at the time of writing, following a 2.5% growth in the past 24 hours according to CoinMarketCap. Bitcoin continues to retest new highs this year, setting new paces at every turn, as fueled by tons of bullish news on its journey to mainstream adoption.

A Morgan Stanley Unit Eyeing Bitcoin

The new rally Bitcoin is charting was apparently fueled by the news that Counterpoint Global, a unit of Morgan Stanley Investment Management with $150 billion assets under management is considering Bitcoin investment. As reported by Bloomberg citing people familiar with the matter, Counterpoint Global is currently exploring whether Bitcoin is a suitable investment for the firm.

Morgan Stanley is an investment banking juggernaut with many institutional clients in its portfolio. A move to directly adopt Bitcoin may be a new turning point for the premier cryptocurrency unto the attainment of its mainstream adoption stride. Morgan Stanley is currently holding about 11% stake in Bitcoin laden MicroStrategy Incorporated, a business intelligence firm that is known for its big Bitcoin investment.

Bitcoin is Currently Backed By Tesla, Others

The institutional adoption of Bitcoin was taken to a new height recently when the news of electric vehicle maker Tesla, investing $1.5 billion in Bitcoin filled the air. Many might say they saw the Tesla bet coming with Elon Musk openly declaring his love for the digital currency prior to that time.

The Tesla move consolidated the stack-up of Bitcoin by other institutions like Grayscale Investment, as well as the backing by Paypal Holding, and Square Inc amongst others. Expectations abound that the more big firms invest in Bitcoin, the more the chances are for others to make a similar move as their actions are bound to de-risk owning the asset by public companies.

Morgan Stanley Becomes First US Bank to Offer Bitcoin Funds to Its Clients

United States banking giant, Morgan Stanley has made history as the first American bank to offer its clients access to Bitcoin (BTC) fund investments.

Per a CNBC report citing people close to the matter, the investment banking giant succumbed to the request of its clients to provide the service, and the provision will let eligible clients have access to three Bitcoin funds, including two from Galaxy Digital, a crypto firm founded by Mike Novogratz, and one from a joint effort from asset manager FS Investments and bitcoin company NYDIG.

While the offer from Morgan Stanley is a good step toward helping drive the corporate adoption of the emerging asset class, there is a condition attached to the qualification. Individual clients of the bank who wants to participate or have access to the fund must have at least $2 million in assets with the bank, while investment outfits must have a minimum asset of $5 million. Both classes of investors must have been held such funds with the bank for at least 6 months.

Investment in cryptocurrencies is still largely unregulated, and per the associated risk involved, Morgan Stanley is limiting the investable amount to the funds to 2.5% of the eligible clients’ total net worth.

A New Room For Institutional Investors To Embrace BTC

Morgan Stanley’s offer to allow its clients to have direct access to Bitcoin investment funds is a major avenue to let institutional investors get aboard the fast-moving train of cryptocurrency investments.

American cryptocurrency-based companies and investors have been clamouring for a Bitcoin Exchange-Traded Fund (ETF) to be approved by the Securities and Exchange Commission (SEC), an investment alternative that lets people have exposure to Bitcoin and other coins without directly owning the assets. While the SEC has had a reservation about this, the Morgan Stanley option will serve as a succour in the interim to let corporate investors get on board BTC train.

Morgan Stanley in Talks to Acquire Multi-Million Dollar Stake in Bithumb Crypto Exchange

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US leading investment bank Morgan Stanley is reportedly negotiating to buy a significant share in Bithumb, a major crypto exchange in South Korea.

The person familiar with the matter within the exchange has disclosed the US-based bank approached and is holding discussions with Vidente video equipment maker, a KOSDAQ company, which owns about a 10% of stake in Bithumb crypto exchange.

Another anonymous source revealed that Morgan Stanley is planning to invest between $254 million and $441 million for Bithumb acquisition. The anonymous source said that the reason why Morgan Stanley used Vidente is because it knows that the video equipment manufacturing company has the right to negotiate a preferred sale to acquire Bithumb.

Demand for Vidente shares surged as a result of the acquisition news as the company stock price rose more than 4.5% higher on Friday yesterday.

Rumors that Bithumb crypto exchange is for sale have been moving around for a while as Lee Jung-Hoon, Bithumb chairman and majority shareholder, has been willing to liquidate his position. Bithumb owners have experienced several failed attempts of selling their shares in recent years. Although the exchange became profitable in 2019, it failed to settle a deal with Singapore-based BK Global Consortium for acquisition.

Early January this year, the leading Asian gaming firm Nexon was planning to acquire Bithumb for an estimate of half a billion dollars. However, the report shows that the negotiations between Nexon and Bithumb have fallen apart.

Morgan Stanley Has Its Eye on Crypto

Morgan Stanley is opening itself to embrace Bitcoin and cryptocurrencies. The developments with regards to Morgan plans to acquire Bithumb emerged two days after reports surfaced that the leading US bank has decided to offer its clients access to Bitcoin fund investments via its traditional investment platform. The offer from the bank is a good step towards helping drive companies adopt the emerging asset class.

This is not the first time when the bank is making such an attempt. According to the US securities and exchange commission (SEC), Morgan Stanley acquired 792,627 shares of MicroStrategy business intelligence company in January this year. The bank bought 10.9% stake in MicroStrategy, thus making it the latest financial giant to profit from Bitcoin’s historic bull run.

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Swiss Banking Giant UBS to Offer Crypto Services to its Clients

Switzerland-based banking firm, UBS Group is looking at several options to bring cryptocurrency-based investments to its rich clients.

According to a Bloomberg report on the matter, the company is reportedly considering crypto investments as a response to the demand from its customers.

The move comes at a time when cryptocurrencies are gaining massive traction among retail and institutional investors. The crypto space has moved from obscurity into the mainstream, a development that is marked by a market capitalization of over $2.3 trillion. According to the cited sources, the potential move by UBS to offer crypto investments is in its effort to remain competitive and prevent its rich clients from seeking similar products from competitors already offering those services.

“We are monitoring the developments in the field of digital assets closely,” UBS said in a statement. “Importantly, we are most interested in the technology which underpins digital assets, namely the distributed ledger technology.”

Per the reports, the cryptocurrency investment option UBS is planning to offer to only take a fraction of its client’s net worth, in order to shield investors from the extreme volatility of the digital currency ecosystem. One of the options that are billed to be explored is investments through third-party investment vehicles.

While the UBS crypto investment move will be welcomed if it is fully confirmed, the bank appears to be a bit late to the party. Global competitors Goldman Sachs and Morgan Stanley are already exploring crypto options in response to an acknowledged shift in broader crypto demand. While Goldman Sachs is on track to offer a Bitcoin service and is looking to hire a new VP to expand its digital asset offerings, Morgan Stanley ranked as the first major bank to offer Bitcoin funds to its clients.

The UBS plans will not be a misstep, with many market experts projecting a continuous growth in retail and institutional demands for cryptocurrency-based products.

Digital Euro Will Pull Out Traditional Bank Deposits by 8%, Says Morgan Stanley

American investment bank Morgan Stanley analysts evaluate the potential impact of the proposed Digital Euro on the Eurozone member countries.

According to a Reuters report, it was estimated that the launch of the Central Bank Digital Currency (CBDC) would significantly reduce traditional bank cash deposits by as much as 8% on aggregate.

Many central banks around the world are researching the ideas of a CBDC. While this is seen as a positive sign to embrace technological innovation in the payment terrain, how it will disrupt the existing money supply remains unanswered by many apex monetary authorities.

Morgan Stanley’s projection gives insight into what countries in the Eurozone might benefit from in the period leading to the launch of the digital euro. The banking giant said its forecasts were based on a “bear case” scenario in which all euro area citizens above the age of 15 transferred 3,000 euros ($3,637) into what would effectively be a European Central Bank-controlled ‘digital wallet’.

“This could theoretically reduce euro area total deposits, defined as households’ and non-financial corporations’ deposits, by 873 billion euros, or 8%,” Morgan Stanley said

Other experts have noted this figure as the theoretical minimum. The report highlighted that smaller countries in the Eurozone, including Latvia, Lithuania, Estonia, Slovakia, Slovenia, and Greece, could theoretically be impacted harder than the average. In these nations, the projected 3,000 euros could amount to 17%-30% of total deposits and 22%-51% of total household deposits.

Countries developing a CBDC will eventually need to prepare how these will impact existing structures in the nation. With China leading the race in its Digital Yuan development, the country has noted above all else that the new form of money will not spark inflation.

Banking Giant Morgan Stanley Purchases 28,289 Shares of Grayscale Bitcoin Trust

According to the U.S. Securities and Exchange Commission document, the US leading investment bank Morgan Stanley is buying 28,289 shares of Grayscale Bitcoin Trust through its European Opportunity Fund.

The document shows that up to 25% of each fund’s portfolio can invest assets in Bitcoin. The European Opportunity Fund includes European companies in technical and non-technical fields and other investments.

The Grayscale Bitcoin Trust is an investment vehicle designed to enable investors to trade Bitcoin shares without actually owning the underlying cryptocurrency, first established in 2013 by Barry Silbert. He also is the founder and CEO of Digital Currency Group (DCG), a Bitcoin and blockchain investment company that has invested in lots of famous companies such as Ripple, Coinbase, Circle, Kraken, and Chainalysis.

Recently, Morgan Stanley remains active in the cryptocurrency market.

According to the coverage from the Blockchain.News on March 21, Morgan Stanley was considering buying a significant share in Bithumb, a major crypto exchange in South Korea.

And on March 18, 2020, Morgan Stanley has made history as the first American bank to offer its clients access to Bitcoin (BTC) fund investments. Morgan Stanley succumbed to the request of its clients by providing the service and provision for those qualified clients to access up to three Bitcoin funds. These funds include two from Galaxy Digital, a crypto firm founded by Mike Novogratz, and one from a joint effort from asset manager FS Investments and bitcoin company NYDIG.

Morgan Stanley Buys Up To $40 Million Worth of Grayscale Bitcoin Trust Shares

The US SEC filings published on Wednesday, August 25, indicate that Morgan Stanley, the world’s third-largest bank, has increased its indirect exposure to Bitcoin by buying more than one million Grayscale Bitcoin Trust shares, currently worth around $40 million.

A Twitter user named “Macroscope,” a financial analyst, was the first one to notice the Morgan Stanley holdings.

The SEC filings show that the bank owns huge amounts of Grayscale Bitcoin Trust shares across over 30 Morgan Stanley funds. The Morgan Stanley Insight Fund (an equity growth fund that manages $8 billion in assets) is the biggest portfolio, with 928,051 Grayscale Bitcoin Shares worth about $36 million. The bank also holds huge amounts of Grayscale Bitcoin (GBTC) in its Morgan Stanley Institutional Fund Inc, the Morgan Stanley Institutional Trust, the Morgan Stanley Variable Insurance Fund, and others.

Morgan Stanley purchased the GBTC shares in June when Bitcoin plunged its value at around $30,000, and GBTC shares declined to the level of $30 each.

Grayscale Bitcoin Trust is an investment product for people who want exposure to Bitcoin in their portfolios but don’t want to hold or manage the physical Bitcoin. As such, GBTC operates by tracking the price of Bitcoin. Those who are investing in GBTC are indirectly investing in Bitcoin since the product reflects the price performance of Bitcoin. GBTC is a US-based digital asset fund that has attracted attention from high-profile investors such as Cathie Wood.

So far, Morgan Stanley has bought more than 6.5 million shares of Grayscale Bitcoin Trust across several of its dozen funds. This makes the bank the second-largest holder of GBTC after Cathie Wood’s ARK Investment management firm owns over 9 million shares.

Investing in Crypto Firms

Morgan Stanley has been increasingly active in the crypto landscape in recent months to meet the rising demand from its clients. The US-based bank has been increasingly interested in investing in companies with crypto interests.

Although the bank has not publicly revealed a direct investment in cryptocurrencies, like purchasing Bitcoin itself, it has consistently invested huge chunks of funds in crypto-related companies.

In January, Morgan Stanley invested $500 million in MicroStrategy – the public company that holds the largest amounts of Bitcoins on the balance sheets – to gain more exposure to the digital asset.

In March, Morgan Stanley became the first US bank to provide its clients with access to Bitcoin funds. The bank succumbed to its client demands to offers such services, and the offering allows eligible clients to access three Bitcoin funds, including two funds from Galaxy Digital, a crypto firm run by Bitcoin bull Mike Novogratz, and the other fund from a joint effort from Bitcoin company NYDIG and asset manager FS Investments.

In June, Morgan Stanley revealed that it bought 28,289 GBTC shares worth $1.3 million through its Europe Opportunity Fund, though that was a relatively small investment compared with today’s filings.