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Morgan Stanley Adds Bitcoin to European Fund

One of the world's biggest investment banks Morgan Stanley is addding Bitcoin to its European fund through GBTC

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One of the world's biggest investment banks Morgan Stanley is adding Bitcoin to their European fund.

In a recent filing, the Morgan Stanley Europe Opportunity Fund revealed it bought $3.6 million worth of Grayscale Bitcoin Trust (GBTC).

“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," Morgan Stanley said.

“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.”

Morgan Stanley Europe Opportunity Fund holds British, Italian, French, Swiss and Dutch equities and 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 overall European Opportunity Fund has $1 billion assets, with the fund in question having $120 million. 3% of the assets have thus been allocated to Bitcoin.

Morgan Stanley's revelations follow that of BlackRock's, which added Bitcoin to its primary fund.

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The move should restore faith in Bitcoin and bolster confidence in the wider crypto market, which suffered tremendously in 2022.

However, Grayscale’s parent company DCG has been at risk of bankruptcy, which could have an adverse effect on the industry. Last week, DCG confirmed that is shutting down a wealth-management division called HQ, which had US$3.5 billion in assets under management.

"Due the state of the broader economic environment and prolonged crypto winter presenting significant headwinds to the industry, we made the decision to wind down HQ" as of Jan. 31, DCG said in a statement last Thursday.

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Morgan Stanley also warned that the value of GBTC could drop "precipitously including zero" for a "variety of reasons." It added that "the GBTC exposure to cryptocurrency could result in substantial losses to the Fund."