Morgan Stanley eyes bitcoin as crypto shows continued strength

February 16 2021
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A $150 billion investment arm of giant Morgan Stanley is considering investing in bitcoin, after Elon Musk’s Tesla announced that it has supported the cryptocurrency with $1.5 billion and was getting ready to accept it as payment.

As bitcoin continues its climb to US$50,000, managing to keep much of its recent gains, news that Morgan Stanley is set to throw its support behind the coin is expected to push the cryptocurrency ever more into the mainstream financial system, driving the price skywards.

In addition, Miami has confirmed that it is considering paying workers and collecting taxes in cryptocurrency and the mayor of the city wants to hold bitcoin in the city’s treasury.

Nigel Green, CEO and founder of deVere Group, believes that while the increasing institutional support will continue to drive bitcoin to new highs in this first quarter of 2021, investors should also expect volatility due to increasing regulatory scrutiny.

“Morgan Stanley, the investment giant, is reported to be considering investing in bitcoin through its $150 billion investment arm; Elon Musk’s Tesla announced it had invested $1.5 billion in the digital currency and was getting ready to accept it as payment; BNY Mellon confirmed that it had created a digital assets unit to build a custody and admin platform for crypto assets; and Mastercard said it would give its merchants the option to accept cryptocurrencies later this year,” Mr Green said.

“This all follows the likes of PayPal’s decision last year to allow customers to buy, sell and hold bitcoin and as Wall Street giants like Goldman Sachs and JP Morgan issue RFIs (request for information) to explore bitcoin and crypto asset custody,” he noted.

With the growing institutional demand, combined with ultra-low interest rates, Mr Green noted bitcoin – which has already given a 55 per cent return so far year to date after the 300 per cent gain in 2020 – would reach new highs in this first quarter of 2021.

“However, with increasing dominance and value comes increasing regulatory scrutiny,” Mr Green warned.

“Bitcoin and other cryptocurrencies will come under the spotlight from watchdogs like never before, and this can be expected to create volatility in the market.”

His warning comes as central banks and governments around the world ramp up their focus on digital currencies.

In the US in recent days, Treasury Secretary Janet Yellen raised again the prospect of future cryptocurrency regulation and the Securities and Exchange Commission could reportedly investigate Elon Musk over Tesla’s $1.5 billion bitcoin purchase.

About the author

Maja Garaca Djurdjevic

Maja Garaca Djurdjevic is the editor of nestegg and Smart Property Investment. Email Maja at [email protected]

About the author

Maja Garaca Djurdjevic

Maja Garaca Djurdjevic is the editor of nestegg and Smart Property Investment. Email Maja at [email protected]

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