Morgan Stanley Report Considers Bitcoin A ‘New Institutional Investment Class’

Bitcoin's rapid growth has seen it become the "new institutional investment class," states a finding in a report published by U.S. investment banking and financial services giant Morgan Stanley.


Bitcoin’s rapid growth has seen it become the “new institutional investment class,” states a finding in a report published by U.S. investment banking and financial services giant Morgan Stanley.

Released October 31, 2018, the latest findings are part of an update to an earlier report titled “Bitcoin Decrypted: A Brief Teach-In and Implications.”

In the report, Morgan Stanley’s research division focuses on bitcoin trends over the last six months, making a conspicuous finding that the leading cryptocurrency’s market has followed a “rapidly morphing thesis.

Morgan Stanley is among an increasing number of Wall Street firms that have become more and more bullish about bitcoin. The company has noted a few startling developments within the crypto industry, and which continue to morph at the moment.

From being seen as “digital cash” to instilling confidence into the investor community, bitcoin has developed to be seen as a key solution to various issues affecting the financial system.

Initially regarded as the new payment system, Morgan Stanley researchers say that bitcoin has eventually become the “new institutional investment class.”

According to the update, 2018 has defined the crypto industry with the investment funds and products that target the space being launched.

The surprises come in the form of a huge number of crypto-related futures as well as the increase in the number of digital assets under management since early 2016.

According to the report, about $7.11 billion worth of crypto is currently held by a growing number of hedge funds, venture capitalists, and private equity firms.

Positive shifts around bitcoin stem from the crypto’s ability to evolve and handle various issues around it, including hacks, hardforks, competing technologies, and market volatility among other concerns, the report noted.

Overall, Morgan Stanley’s favorable view on bitcoin is a strong signal that Wall Street is fast becoming charmed by digital currencies.

Major financial institutions and mainstream investment companies have steadily looked at ways of getting into crypto by mooting various products. Last month, behemoth Fidelity launched its Digital Assets Aervice and comes after Wall Street heavyweights Citigroup and NASDAQ stated their interest in offering bitcoin trading options.

In October, anonymous sources revealed that Morgan Stanley had plans to offer bitcoin trading options for its clients.

With client demand growing, investments in cryptocurrency are expected to spike in the subsequent years as space gains further regulatory certainty and regulated custodian solutions come to the market.

The researchers also focused on decentralized technologies noting that these blockchain-based solutions could have a positive real-world impact. In the crypto world, the report views the rise of the stablecoin as pivotal to cryptocurrency.

However, it warns that not all stable-price coins will survive unless they have “the lowest transaction costs, highest liquidity, and a defined regulatory structure.”

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