Morgan Stanley invests $270 million in Bitcoin spot ETF

The $270 million investment in the Bitcoin spot ETF made Morgan Stanley the largest holder of GBTC after Susquehanna International Group's $1 billion.

According to a 13F filing with the SEC in the first quarter, Morgan Stanley invested $269.9 million in the Bitcoin spot ETF through Grayscale's GBTC fund, becoming the largest GBTC holder after Susquehanna International Group's $1 billion. (based on Fintel data).

13F filings are quarterly reports filed with the SEC, by investment management organizations with at least $100 million in assets under management (AUM). 13F filings provide the manager's overall portfolio at the end of each quarter. However, 13F only requires declaring long positions, not disclosing short positions.

Morgan Stanley is also one of several Global Systemically Important Banks (G-SIBs) that have revealed investments in Bitcoin spot ETFs, alongside Royal Bank of Canada, JP Morgan Chase, Wells Fargo, BNP Paribas and UBS.

Not only are there global banks in the Bitcoin spot ETF investment list, the 13F filing also has the appearance of a number of companies "silently" investing capital through Wall Street asset management funds, including:

·      Pine Ridge Advisers, a New York-based consulting firm, has a $205.8 million investment in the Bitcoin spot ETF. Of which, 83.2 million USD went to BlackRock's IBIT - 93.4 million USD to Fidelity's FBTC - 29.3 million USD to Bitwise's BITB. These shares account for 23% of total assets managed by Pine Ridge Advisers.

·      Boothbay Fund Management, a hedge fund managing $5.1 billion AUM based in New York, invested a total of $377 million in Bitcoin spot ETFs, including $149.8 million in IBIT - $105.5 million in FBTC - 69.5 million USD into GBTC - 52.3 million USD into BITB.

·      Aristeia Capital Llc, which manages $4.5 billion in assets, has disclosed a $163.4 million investment in IBIT.

·      Connecticut-based investment firm Graham Capital Management revealed a total investment of $102.6 million with $98.8 million in IBIT and $3.8 million in FBTC.

·      Hedge fund management company Crcm Lp invested $96.6 million in IBIT.

·      New York investment management firm Fortress Investment Group LLC disclosed a $53.6 million investment in IBIT.

·      Bracebridge Capital, the hedge fund that manages the endowments of Yale University and Princeton University, holds a combined $434 million in shares in Ark Invest's ARKB, IBIT and GBTC funds.

Morgan Stanley's decision to invest approximately $270 million in Bitcoin spot ETFs through GBTC may be the initial strategic move to diversify its portfolio, and explore the potential of this new asset class. In the past, Morgan Stanley had information that they were "exposed" to spot Bitcoin ETFs.

The news comes at a time when more asset managers and traditional investment advisory firms are showing interest in digital assets. Most recently, the Bitcoin spot ETF also attracted $163 million from the Wisconsin state pension fund (SWIB), and $2 billion from the Millennium Management hedge fund.

Bitwise's Chief Information Technology Officer (CIO), Matt Hougan, commented on the recent wave of "investment" in digital assets through a blog post.

He roughly estimates that more than 700 professional companies have invested nearly 5 billion USD in this asset class as of the 13F report submission deadline on May 15.

Hougan calls the trend “professional investor ownership on a historic scale,” only previously seen with the launch of the Gold ETF in 2004 – widely considered the ETF launch most successful at that time