Morgan Stanley redefines cryptocurrency as an "institutional investment class"

01 Nov, 2018
by Matthew Kim
Morgan Stanley redefines cryptocurrency as an institutional investment class

In a report by the banking giant Morgan Stanley, cryptocurrencies were newly labeled as an institutional investment class after its research division found trends that showed that institutional investors are increasingly investing in cryptocurrencies. The report, titled “Bitcoin Decrypted: A Brief Teach-In and Implications”, updated the classification of the digital assets based on statistics from the last six months.

The arrival of institutional money has been highly anticipated in the cryptocurrency community, but recent reports have indicated that the money has already been slowly trickling in. Morgan Stanley’s update supports these reports, stating that these investors have gained “full confidence”. In the past half year, institutions have begun investing while the retail investors have come to a halt.

Consequently, Morgan Stanley’s research group has modified their thesis to define cryptocurrency as a “new institutional investment class”. The report cites several notable activities in recent times to support the change, including creation of Fidelity’s new crypto services division, Coinbase’s fundraising round, and regulatory developments.

The report also mentioned the persisting problems that clients found with cryptocurrency as an investment class. These problems were regulatory uncertainty, lack of regulated custodian solutions, and lack of large financial institutions in the space. Yet if the institutions are truly gaining confidence as the report states, it should only be a matter of time that these problems are fixed and money begins to pour in.

Click here for the report (Morgan Stanley Research access needed)


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