Morgan Stanley: Bitcoin Could Enter U.S. Bank Balance Sheets, But Still Faces Hurdles

Morgan Stanley’s Head of Digital Asset Strategy, Amy Oldenburg, stated that Bitcoin could eventually be included on U.S. bank balance sheets. However, it still faces multiple regulatory and capital rule obstacles before that becomes a reality, including Federal Reserve policies, Basel requirements, and global regulatory coordination issues.

Oldenburg noted that as the regulatory environment gradually improves and client demand rises, Morgan Stanley is continuously expanding its digital asset business. The bank recently launched MSBT, the first Bitcoin exchange-traded product (ETP) issued by a U.S. licensed bank. Within just six days of its launch, it attracted over $100 million in inflows, all from self-directed trading clients. It has not yet been opened to advisory channels, indicating strong market demand.

She also pointed out that a significant gap currently exists between client demand and advisor allocation. Morgan Stanley recommends clients allocate 2% to 4% of their assets to Bitcoin, but advisor adoption has been slow, primarily constrained by a lack of knowledge and education. Currently, approximately 80% of ETP investments on the platform come from self-directed trading.

On the industry level, BlackRock’s spot Bitcoin ETF, IBIT, has amassed over $61 billion in assets under management since its launch in January 2024, making it one of the fastest-growing ETFs in history and further validating institutional demand.

Additionally, Morgan Stanley is applying for a digital trust charter from the Office of the Comptroller of the Currency (OCC), which could potentially enable self-custody of crypto assets and spot trading services in the future. Currently, the MSBT product uses Coinbase and BNY Mellon as dual custodians. (CoinDesk)