In a recent filing with the Securities and Exchange Commission (SEC), Morgan Stanley revealed its intention to incorporate exposure to Bitcoin indirectly through investments in exchange-traded funds (ETFs) within some of its funds.
The investment giant aims to integrate newly introduced spot Bitcoin ETFs into 13 of its investment vehicles, including Advantage Portfolio, Asia Opportunity Portfolio, Counterpoint Global Portfolio, and International Opportunity Portfolio. However, the allocation to Bitcoin ETFs within these funds is capped at 25% of their total assets.
Acknowledging the associated risks, Morgan Stanley emphasised that these investments carry similar risks to direct investments in cryptocurrencies like Bitcoin.
“The Fund may gain investment exposure to Bitcoin indirectly through its investments in Bitcoin ETFs. The extent of the Fund’s investment in Bitcoin ETFs will be subject to specific limits at the time of investment. The risks associated with investing in Bitcoin ETFs are akin to those of investing in cryptocurrencies generally. Investing in a Bitcoin ETF exposes the Fund to all risks related to Bitcoin,” the filing explained.
This move by Morgan Stanley marks a continuation of its positive stance towards crypto-related investments. Previously, some of the firm’s funds held shares of Grayscale’s Bitcoin Trust (GBTC) before it transitioned into a spot-traded ETF.
Morgan Stanley’s filing is expected to catalyse the adoption and expansion of spot Bitcoin ETFs introduced earlier. Since their launch in January, Bitcoin ETFs have triggered a surge in Bitcoin’s price, surpassing the $60,000 mark. This surge has been propelled by substantial inflows into ETFs exceeding $7 billion and notable accumulation by institutional investors.
Despite optimism surrounding this upward trajectory, experts caution against a potential correction in Bitcoin’s price. Technical analysts point to indicators suggesting that Bitcoin may be nearing a cycle peak.
“Since September 11, Bitcoin has seen a 233% increase. The most significant price decline recorded was -15.7% from January 8 to January 22. While I believe a dip below $55,000 could present a buying opportunity, such a dip is not my prediction,” noted trading veteran Peter Brandt.
Another indicator, the golden ratio multiplier, indicates that Bitcoin peaks typically occur around “Level 5,” which currently stands at $67,500 in the current cycle. Historically, this indicator has accurately predicted retracements after Bitcoin reaches this level.
“Level 5 marks the peak of each cycle, holding the highest price target for any mid-top price point,” explained technical analyst CryptoCon.