Morgan Stanley to Enable Bitcoin ETF Recommendations, Signaling Major Crypto Adoption

Morgan Stanley, the foremost wealth manager in the United States, is set to enable its 15,000 financial advisers to recommend Bitcoin exchange-traded funds (ETFs) to their clients. According to a CNBC report, starting August 7, these advisers can guide eligible clients toward investing in two prominent BTC ETFs: BlackRock’s iShares Bitcoin Trust (IBIT) and Fidelity’s Wise Origin Bitcoin Fund (FBTC).

This development signifies a landmark achievement for the cryptocurrency sector. Historically, major financial advisory firms, known as wirehouses—including notable names like Bank of America, JPMorgan Chase, and Wells Fargo—have been reluctant to embrace spot crypto ETFs. Despite the burgeoning valuations of cryptocurrencies, their reach has remained relatively confined to their core audience. In 2024, approximately $60 billion has flowed into spot crypto ETFs, primarily from crypto-savvy retail investors and hedge funds. Wirehouses, which collectively manage trillions of dollars, have stringent criteria for new financial products. Hence, Morgan Stanley's acceptance of crypto ETFs is seen as a pivotal moment. Kyle DaCruz, director of digital assets product for VanEck, an asset manager backing crypto ETFs, described this as “a game changer” for the industry.

Morgan Stanley, the largest among the wirehouses, oversees about $3.75 trillion through its advisory network, including $1 trillion in self-directed client accounts. Across all its banking divisions, the firm manages a total of $6.2 trillion, as reported by financialplanning.com.

The IBIT and FBTC funds from BlackRock and Fidelity are establishing themselves as leading options among Bitcoin ETFs. Their adoption is not limited to major wirehouses like Morgan Stanley; independent financial advisers are also showing significant interest. 

The increasing adoption of Bitcoin ETFs by leading advisory platforms is expected to drive substantial inflows from advisers into these financial products, potentially reshaping the landscape of cryptocurrency investments.