BREAKING: Billion-Dollar JP Morgan Stanley Opportunity Fund to Acquire Bitcoin (BTC) through Grayscale’s GBTC in an Unprecedented Move
In a groundbreaking development, the Morgan Stanley Opportunity Fund, valued at over a billion dollars, is reportedly planning to invest up to a quarter of its total assets into Bitcoin. The investment will be made through the Grayscale Bitcoin Trust (GBTC), a popular avenue for institutional investors to gain exposure to Bitcoin.
This move by Morgan Stanley aligns with the bank’s investment strategy and adds fuel to the already surging speculation around the potential approval of Bitcoin exchange-traded funds (ETFs) by the US Securities and Exchange Commission (SEC).
The details of this significant move came to light as Morgan Stanley filed a new shareholder report for its actively traded Morgan Stanley Opportunity Fund. According to the report, the fund may invest up to 25% of its assets in a subsidiary named Europe Opportunity Cayman Portfolio, Ltd., which has the potential to indirectly invest in Bitcoin through cash-settled futures or investments in GBTC.
Renowned crypto commentator MartyParty brought attention to this development, emphasizing that the shares of the subsidiary are not expected to be available for external investors. The report reveals Morgan Stanley’s intention to allocate around $140 million to the subsidiary, showcasing the bank’s commitment to exploring the digital asset market.
The decision to indirectly invest in Bitcoin is in line with Morgan Stanley’s broader strategy of gaining exposure to commodity markets while adhering to tax regulations. The report highlights the need for the fund to limit its gross income derived from such investments to ten percent in order to qualify for favorable tax treatment as a Regulated Investment Company (RIC).
However, it is important to note that the fund’s investment strategy is subject to potential changes in legislation or regulations. Any alterations to the tax treatment of income received from the subsidiary could significantly impact the fund’s strategy and performance.
Morgan Stanley’s move to explore Bitcoin investment opportunities echoes the growing interest in cryptocurrencies among institutional investors. This potential allocation to Bitcoin through a wholly-owned subsidiary demonstrates the bank’s recognition of the benefits and potential presented by the digital asset.
In the past, Morgan Stanley has advised investors to consider including Bitcoin in their portfolios, anticipating a positive market sentiment around the upcoming halving event in April. While the report does not provide a specific long-term price target, it suggests that Morgan Stanley expects Bitcoin’s price to rally beyond its all-time high following the halving, based on historical performance in previous bull markets.
As of now, Bitcoin is trading at $45,343, having reached a one-year high of $45,900 earlier this week. The cryptocurrency has experienced a significant surge of over 6.86% in the past seven days, boasting a market capitalization of $888.6 billion and a trading volume of $31.3 billion.