Multinational investment bank Morgan Stanley has urged investors to proceed with caution on cryptocurrencies as the asset class remains in its infancy in terms of price discovery.
In a note drafted by Morgan Stanley’s wealth management unit, as quoted by The Block, it reiterated that investment in cryptocurrencies like Bitcoin is speculative.
It did, however, reaffirm that while cryptocurrencies carry a lot of risk, it is currently maturing to a stage where it may become an ivnestible asset within a diverse portfolio.
Morgan Stanley just filed an SEC form declaring they now own 792,627 shares (10.9%) of MicroStrategy.
They've increased their position by 360%, adding almost 650,000 shares since Q3 2020.
Even the banks want Bitcoin 👀 pic.twitter.com/SqvryJZu3t
— Kevin Rooke (@kerooke) January 8, 2021
“For speculative investment opportunities to rise to the level of an investable asset class that can play a role in diversified investment portfolios requires transformational progress on both the supply and demand sides.” It stated.
“With cryptocurrency, we think that threshold is being reached. A firming regulatory framework, deepening liquidity, availability of products and growing investor interest—especially among institutional investors—have coalesced.”
The note concluded by stating that cryptocurrency trading remains “in its infancy”, before stating that the bank is “yet to be convinced” and that it advises clients to proceed with caution.
Morgan Stanley owns more than 10% of MicroStrategy shares, which has been considered to be indirect exposure to Bitcoin in light of MicroStrategy’s close to 100,000 Bitcoin holdings.
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