- Bitcoin price action has made institutions turn heads, increasing the cryptocurrency demand as its supply continues to diminish.
- A major private bank offers BTC exposure after an influx of client demand but warns of the suitability of those with "high-risk tolerance."
- A Hong Kong-listed firm scoops up $90 million in Bitcoin and Ether, expecting ample room for appreciation in value.
Bitcoin has seen a meteoric rise in 2021; with the new asset class's exploding price action, institutions have increasingly embraced digital currencies. Cryptocurrencies are moving towards the mainstream where major companies, including MicroStrategy, Square, PayPal, and Tesla — to name a few, are confident in the future.
Wall Street under pressure to offer exposure to Bitcoin
Morgan Stanley has recently become the first big US bank to offer its clients access to three funds that enable Bitcoin ownership.
According to CNBC, this move was made after the firm's clients requested exposure to the digital currency, which has put prestigious banks under pressure to get involved in the new asset class.
With $4 trillion in client assets worldwide under Morgan Stanley's wealth management arm, the private bank emphasized that the exposure to Bitcoin is only suitable for those with "aggressive risk tolerance" and with at least $2 million in assets held by the firm. Morgan Stanley also limits investments to 2.5% of the client's total net worth.
Bitcoin's popularity seems to have hit a pivotal point after Tesla CEO Elon Musk revealed adding this cryptocurrency to its balance sheet. With Morgan Stanley now joining the BTC craze, it poses the question of whether other institutions and blue-chip companies will follow suit while retail investors replicate their actions.
The CME Group suggested that Bitcoin futures open interest grew by over 100% over the past eight months. CME futures represents a part of institutional interest in cryptocurrencies and derivative products. The firm expects that this new asset class's demand will stay at the same levels or grow even more.
Chinese tech giant stockpiles $90 million worth of crypto
While the major bank in the US is just now carefully dipping its toes in the cryptocurrency industry, Chinese tech giant Meitu announced that the firm purchased an additional 386 Bitcoin and 16,000 Ether, worth approximately over $50 million, taking its net spend on digital assets to approximately $90 million so far.
The Xiamen-headquartered company initially purchased 15,000 ETH for roughly $22.1 million and 379 BTC for around $17.9 million on March 5.
With the firm's Cryptocurrency Investment Plan's main goal to reach a net purchase value of a minimum of $100 million in cryptos, the additional purchase was made through its subsidiary, Miracle Vision.
The company's board members emphasized that cryptocurrencies have "ample room for appreciation in value" and that allocating part of its treasury into the new asset class could be better stores of value than cash.
The world's largest cryptocurrency reached a high of $61,000 on March 14 but has erased some of its gains in the days that followed. Although Bitcoin has lost support at $58,000, BTC has held steady at above $55,000 and is trading at $59,069 at the time of writing.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.