Cryptocurrency markets may be down the present, but this has not hindered a widespread interest from institutional investors.
The latest episode of ‘Crypto meets Wall Street’ involves multinational investment bank, Morgan Stanley.
The New York-based bank is reportedly planning to offer investment vehicles that will make it easier for its clients to access the cryptocurrency markets.
Bloomberg, citing anonymous a source familiar with the matter, originally reported that the bank planning to offer trading in derivatives tied to bitcoin [BTC].
Nature of Morgan Stanley’s Crypto Investment Vehicles
While commenting on the crypto space in January, CEO of Morgan Stanley, James Gorman said that the bank did not intend to trade bitcoin directly.
He added that bank will favor having a trading desk to support various crypto derivatives instead.
Accordingly, Bloomberg’s source, who seems to be an insider, revealed that the Bank plans to introduce swap deals tied to bitcoin futures contracts.
Investors will be able to take long and short positions using the swaps while the will bank charges a spread for each transaction.
In preparation for the offering, the bank reportedly hired Andrew Peel from Credit Suisse Group two months ago to lead its crypto assets market. The source said the bank was prepared to launch its crypto-related product once demand from institutional clients is established.
Crypto Meets Wall Street
The demand cryptocurrency investment vehicles have caught up with Wall Street as major investment banks are seeking ways to serve crypto investment vehicles to their clients.
Goldman Sachs had in the past indicated strong interest to offer bitcoin futures contracts with a top official of the bank citing customer interests in cryptos. Later, there were indications that the bank was set to offer crypto custody services for its clients.
Goldman Sach’s CFO Martin Chavez summarized the banks crypto ambition:
“The next exploration phase is what they refer to as non-derivatives forwards…these are over the counter derivatives which are settled in USD and the reference price is the BTC/USD price set by some groups of trading platforms.”
Recently, Citigroup announced that it had created a less-risky crypto investment product called digital asset receipts for institutional clients.