Bitcoin and banks do not usually go hand-in-hand, as Bitcoin’s original idea of creation was to eliminate banks whatsoever. However, banks nowadays are not missing out on the opportunity to add digital assets such as the world’s largest cryptocurrency into their portfolios – whether it is a direct or an indirect investment.
One of the largest investment banks in the U.S, Morgan Stanley, purchased over 6.5 million shares of Grayscale Bitcoin Trust (GBTC), worth around $240 million as of press time, according to a SEC paperwork made by the investment bank. This puts Morgan Stanley directly in the second place of investment bank-owned GBTC, with Cathie Wood's ARK Investment Management, which owns over 9 million shares, occupying the first place.
Morgan Stanley’s decision to go strong on GBTC purchases seems to come in contrast with the behavior of other investment banks, as they usually stay away from such investments. However, the bank played along with hedge funds and asset managers and purchased 28,000 GBTC shares for its Europe Opportunity Fund a few months ago. The investment bank usually goes the mutual fund way – with its holdings separated between investments in securities such as stocks and bonds.
Bitcoin Trusts have become a great method of getting exposure to Bitcoin without the need of actually holding the digital asset. In order to get on the GBTC bandwagon, investors have to cash in at least $50,000, pay a 2% fee, and endure a six-month vesting period on their possessions/shares.
GBTC prices and Bitcoin prices don’t always match, so users may end up paying more or less than Bitcoin’s price. This is due to the six-month vesting period. For instance, GBTC currently sells at a 13% discount, and investors have been able to buy into GBTC for less than BTC since March.
Despite the vesting period and the high minimum investment requirement, Grayscale’s Bitcoin trust accumulated over $31 billion in assets under management, apart from an additional $9 billion in other crypto-based trusts.