Morgan Stanley Funds Increase Their Holdings in GBTC by More Than 2.64 Million Shares in Q3

Morgan Stanley adds to its holdings in the Grayscale Bitcoin Trust, which is now valued at more than $120 million, as the CEO has said that crypto and blockchain “are not going away.”

According to regulatory filings, Morgan Stanley purchased at least millions of extra shares of the Grayscale Bitcoin Trust (GBTC) for a couple of its funds during the third quarter. At today’s values, the additional GBTC shares are worth more than $120 million.

According to a statement filed with the US Securities and Exchange Commission (SEC) on Tuesday, the Morgan Stanley Insight Fund (CPODX) reported owning 1,520,549 shares of GBTC as of September 30. As of June 30, it had 928,051 shares of GBTC, according to a separate filing.

Morgan Stanley Institutional Fund’s Growth Portfolio reported owning 3,642,118 shares of GBTC at the end of Q3, up from 2,130,153 at the previous quarter’s conclusion. According to the report, the offering’s Global Opportunity Portfolio had 1,463,714 shares of the trust, up from 919,805 three months before.

Morgan Stanley’s representative did not immediately respond to a request for comment from Blockworks. MacroScope, a Twitter account, noted the company’s rising GBTC holdings.

GBTC continues to be a popular cryptocurrency investment product. According to Morningstar Analyst Bobby Blue, 47 mutual funds and individually managed accounts owned GBTC as of September, the most of any cryptocurrency investment product. He stated that Ark Invest is a significant shareholder in the trust, holding around $375 million in the trust’s shares via its Ark Next Generation Internet ETF (ARKW), as well as through its SMAs and model portfolios.

GBTC, a grantor trust, presently manages $36.7 billion in assets. For the most of the year, its shares have been trading at a discount as additional bitcoin-related financial products have entered the market, Blue stated. The fund’s 2% fee ratio and constraints as a trust have resulted in significant returns differentials between the product and bitcoin itself, he continued.

According to Morningstar statistics, the offering returned 42% in 2021 as of October 29, less than half of bitcoin’s 95% return over the same period.

According to a spokeswoman for Grayscale Investments, an ETF is the most effective solution to resolve any mismatch between the share price of the firm’s goods and the net asset value.

Last month, the business sought to convert GBTC to an ETF, albeit the SEC has not yet approved ETFs that invest directly in bitcoin.

“An ETF is what our investors want and, in our opinion, deserve,” Grayscale CEO Michael Sonnenshein said Tuesday on Twitter.

The regulatory disclosures come after Morgan Stanley CEO James Gorman said last month during the firm’s results call that although the business does not trade cryptocurrency directly for retail customers, it does provide exposure to the industry via funds.

Gorman continued by stating that he does not feel cryptocurrency is a fad. “These are not passing trends, and the blockchain technology that underpins them is clearly very real and strong,” he told investors during the call. “… However, it is not a significant portion of the commercial demand from our customers. That may change, and we will change along with it.”

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