Morgan Stanley, one of the world’s biggest investment banks, with $6.5 trillion in Assets Under Management (AUM), has recently disclosed that it currently holds Bitcoin (BTC), the largest cryptocurrency by market cap, on behalf of its fund customers.
In a recent filing, the Morgan Stanley Europe Opportunity Fund revealed that it purchased $3.6 million worth of GBTC (in Grayscale Bitcoin Trust).
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The filing reads in part:
“The Fund may, consistent with its principal investment strategies, invest up to 25% of its total assets in a wholly-owned subsidiary of the Fund…
“The Subsidiary may invest in bitcoin indirectly through cash settled futures or indirectly through investments in Grayscale Bitcoin Trust (BTC) (“GBTC”), a privately offered investment vehicle that invests in bitcoin.”
This fund, which mostly holds British, Italian, French, Swiss, and Dutch equities, aims to “maximize capital appreciation by investing primarily in high-quality established and emerging companies located in Europe that the investment team believes are undervalued at the time of purchase.”
The US-based GBTC has therefore been added as a diversifier, with the overall European Opportunity Fund stated as having $1 billion in assets, but this specific one has about $120 million.
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Morgan Stanley has therefore allocated 3% of the assets to bitcoin, although those GBTC shares are now worth $1 million so at this point, it is 1%.
Meanwhile, academic studies have suggested that at least 1% of a portfolio should be allocated to bitcoin for higher risk-adjusted returns.
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