US investment bank Morgan Stanley may be positioning itself so that even if its newly announced Spot Bitcoin exchange-traded fund underperforms, it will still deliver strategic benefits to the entire company, according to ProCap’s Chief Investment Officer Jeff Park.
“Morgan Stanley is betting that even if their ETF doesn’t hit big, there’s an intangible benefit that will help them build leverage,” Park he said on Wednesday.
His comments come just a day after Morgan Stanley filed with the US Securities and Exchange Commission to launch two ETFs, one linked to Bitcoin (BTC) and the other to Solana (SOL).
Crypto market “much bigger” than believed
Park said that regardless of how significant the inflows are for Morgan Stanley’s new products, the move will bring social, reputational and financial benefits.
He pointed to Morgan Stanley’s “focused attention” on monetizing its brokerage arm ETRADE through crypto trading and tokenization partnerships.
“This becomes particularly relevant as a positive externality if it helps recruit top talent over competitors,” Park said.
Park said the announcement shows that the crypto market is “much bigger” than crypto industry experts expected. “Especially to reach new customers,” he said.
He also argued that another factor beyond performance is the reputational advantage that the spot Bitcoin ETF gives the company by making it appear pro-Bitcoin.
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“That’s because every asset manager knows that owning a Bitcoin ETF is about being forward-thinking, young and a bit edgy,” Park said.
“Others may follow,” says an ETF analyst
Morningstar ETF analyst Bryan Armor told Reuters said on Tuesday that Morgan Stanley’s sudden move into cryptocurrencies may mean it wants to “move clients who invest in Bitcoin into its ETFs, which could give them a head start despite their late entry.”
“A bank entering the crypto ETF market adds legitimacy to it, and others may follow,” Armor said.
Morgan Stanley is considered one of the world’s three largest investment banks, along with Goldman Sachs and JPMorgan. While the other two companies have ties to crypto investments, neither offers its own crypto ETF.
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