Investment bank Morgan Stanley has added millions of additional shares of the Grayscale Bitcoin Trust (GBTC) to its portfolio. The shares, which were added in the third quarter of 2021, are worth about $120 million at today’s prices.
Morgan Stanley, one of the top 5 investment banks in the United States, filed this in a report to the Securities and Exchange Commission (SEC) last Tuesday. The bank has now three funds that hold GBTC shares. Across these three funds, it now holds about $300 million dollars worth of Bitcoin via GBTC. The three funds that hold GBTC are:
- Morgan Stanley Growth Portfolio
- Morgan Stanley Insight Fund
- Morgan Stanley Global Opportunity Portfolio
The Grayscale Bitcoin Trust was the first of an increasing number of ways in which financial institutions can be exposed to Bitcoin. For example, Cathie Wood’s ARK Invest is one of the biggest holders of GBTC. These funds can’t simply ‘stack sats’ by making an account on Litebit or another exchange. They have to look for other, traditional ways, such as shares in this trust. Another way to be exposed to Bitcoin or other cryptos is to buy shares in an ETF (exchange-traded fund). Two of these ETF’s have recently launched in the United States. They were not yet available in the third quarter of 2021.
The Grayscale Bitcoin Trust is by far the biggest bitcoin investment vehicle. It owns more than 600.000 Bitcoin, worth over $30 billion at current prices. As an investment vehicle, GBTC has its disadvantages though. The price of the shares often deviates from the price of Bitcoin. The difference can be as much as 20%. Perhaps for this reason Grayscale has recently filed to restructure its fund as an ETF but hasn’t been granted permission by the SEC.
Buying the dip
It appears that Morgan Stanley is slowly but surely raising its stake in the crypto space. In September, for example, it announced it would set up a crypto-focused research division.
In any case, the fact that an institution like Morgan Stanley (indirectly) bought more bitcoin in the third quarter, shows their ongoing commitment. The third quarter saw an extended dip in the Bitcoin price, an opportunity which the investment bank didn’t seem to mind – on the contrary.