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The first major US bank to offer its clients access to bitcoin money

The investment bank told its financial advisers on Wednesday in an internal memo that it is starting access to three funds that enable ownership of bitcoin, according to people with direct knowledge of the issue.

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Two of the offered funds are from Galaxy Digital, a crypto company founded by Mike Novogratz, while the third is a joint effort of asset manager FS Investments and Bitcoin NYDIG

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Morgan Stanley allows only wealthy clients access to volatile assets: The bank considers it suitable for people with "high-risk tolerance" and who have assets of at least $ 2 million held by the company. Investment firms need at least $ 5 million in the bank to qualify for new stakes.

Morgan Stanley was the first major US bank to offer its wealth management clients access to bitcoin money, as exclusively learned by CNBC.

The investment bank, a wealth management giant with $ 4 trillion in client assets, told its financial advisers Wednesday in an internal memo that it is starting access to three funds that enable Bitcoin ownership, according to people with first-hand knowledge of the issue.

The move, an important step for accepting bitcoin as an asset class, was taken by Morgan Stanley after customers demanded exposure to the cryptocurrency, people, who declined to be identified, said they shared details about the bank's internal communications. Bitcoin's rally in the past year has put Wall Street firms under pressure to consider slipping into the emerging asset class.

But, for the time being, at least, the bank only allows its wealthy clients access to volatile assets: The bank considers it suitable for people who have a "high-risk tolerance" and have assets of at least $ 2 million that the company holds.

Some limitations

Investment firms need at least $ 5 million in the bank to qualify for new stakes. Either way, the account must be at least six months old.

People said that even for accredited US investors with sufficient brokerage accounts and assets to qualify, Morgan Stanley limits bitcoin investments to up to 2.5% of their total net worth.

Two of the offered funds are from Galaxy Digital, a crypto company founded by Mike Novogratz, while the third is a joint effort of asset manager FS Investments and Bitcoin NYDIG.

The Galaxy Bitcoin Fund LP and FS NYDIG Select Fund have a minimum investment of $ 25,000, while the Galaxy Bitcoin Fund LP has a minimum investment of $ 5 million.

People said customers will likely make investments as early as next month, after the bank's financial advisors complete training courses linked to the new offerings.

The wealth management divisions of Goldman Sachs, JPMorgan Chase, and Bank of America currently do not allow their advisors to make direct investments in bitcoins.

Earlier this month, JPMorgan submitted documents related to a new debt investment linked to a basket of stocks with exposure to cryptocurrencies such as MicroStrategy, the software company that keeps bitcoin on its balance sheet, and the payments company Square.