Morgan Stanley is dropping long-standing restrictions on which of its wealth management clients can invest in crypto funds, broadening access across its $8.2 trillion platform.
Starting Oct. 15, financial advisors will be able to offer bitcoin and crypto funds to any client — including those with retirement accounts — according to reporting by CNBC.
Until now, only investors with more than $1.5 million in assets and an aggressive risk profile could participate. In other words, Morgan Stanley will soon let all its wealth management clients, including those with retirement accounts, invest in crypto. No asset-cap required.
The move marks a major policy shift for the world’s largest wealth manager and reflects Wall Street’s accelerating embrace of digital assets since President Donald Trump’s administration took a friendlier stance toward crypto.
It follows Morgan Stanley’s recent plan to enable trading of bitcoin and other crypto on its E-Trade platform. To manage risk, the firm will use automated systems to ensure clients don’t become overexposed to crypto, CNBC reported.
Morgan Stanley acquired ETRADE in an all-stock deal valued at roughly $13 billion back in 2020.
Bitcoin allocation of up to 4%
Its investment committee advises clients to have a maximum allocation of up to 4% to bitcoin and other crypto, depending on individual goals. The bank’s recent report describes bitcoin as a “digital gold” and a legitimate real asset, noting its growing maturity despite ongoing volatility.
Morgan Stanley said that clients should regularly rebalance their multi-asset portfolios — ideally every quarter, or at least once a year.
“Such rebalancing will dampen the potential for swelling positions, which could mean outsized portfolio-level volatility and cryptocurrency risk contributions in periods of macro and market stress,” the report read.
The report recommended gaining exposure through exchange-traded products to manage volatility and prevent portfolio distortion during strong uptrends.
The approach indicates a measured but open stance toward integrating crypto within traditional investment frameworks. This news corresponds with bitcoin reaching higher and higher highs.
On August 7, President Trump signed an executive order to expand investment options in retirement plans under ERISA. It instructs federal agencies to make it easier for 401(k) and 403(b) plans to include alternative assets like crypto, private equity, and real estate when deemed suitable by fiduciaries.
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