The well known Morgan Stanley plans to offer Bitcoin swaps, a complex derivate, tied to the largest cryptocurrency in a not too distant future, according to Bloomberg.
A few months back Morgan Stanley reported that they have been researching the financial sector for decades and gained universal acclaim as it was able to provide governments and other institutions valuable insights, which have significantly aided their development. The company released new research in Mai, which targeted crypto markets, specifically exchanges. The research measured trading volumes in different regions and estimated the number of total crypto exchanges.
Not surprisingly, the bank went from researching to hire the digital expert Andrew Peel and have been involved with Bitcoin futures since the beginning of the year, and the CEO, James Gorman, said that Bitcoin is fascinating; “By definition speculative, but nonetheless a fascinating development and more than a fad.” They also said that the bank wouldn’t let customers buy and sell cryptocurrencies directly through Morgan Stanley, but would instead build a trading desk to support various derivatives tied to digital assets.
The most recent news, by Bloomberg, states that the U.S bank, Morgan Stanley, plans to offer complex trading derivate according to a person who is familiar with the matter. The trading derivate will offer traders and investors the opportunity to trade contracts that give them synthetic exposure to the performance of Bitcoin. Investors will be able to go long (buy) or sell short (make money as the price is going down) using the famous price return called swaps. Morgan Stanley will then charge a spread, the difference between the buy and sell price, for each transaction.
Technically, the bank is already prepared to launch the instrument but are awaiting a proven institutional demand and the completion of an internal approval process before launching. However, a spokesman for Morgan Stanley declined to comment on the initiative.
That being said, Morgan Stanley is not the only bank looking for opportunities with the digital assets. Goldman Sachs and Citigroup Inc are two others that are working on new products, tied to Bitcoin that has lost around 70% of its value this year.
Goldman Sachs announced, for example, a week ago that they are looking into the creation of a custody product to switch focus to big institutions. According to the company, they are pouring the firms resources into the new exciting project.
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Dennis Sahlström has been trading and investing since 2012 and has for the last two years been consistently profitable. He has been in the crypto- and blockchain space since the middle of 2017 and realized its potential for our world, not least how it is transforming the society we live in. He has now created an education platform, together with the wealth coach Marcus the Maria. They teach regular people how to invest and trade in the cryptocurrency market with proven strategies. If you want to learn more and feel like its time to get into this new asset class, download our free book and register to the next live training to get your future in cryptocurrencies started.