Morgan Stanley, one of the world’s largest investment banks just poached Credit Suisse’s ‘bitcoin expert’ to head the former’s crypto division. This hiring is a definite sign that the firm is looking to gain some exposure in the cryptocurrency space and further diversify their assets. But that’s not the only reason why they are doing that. More and more institutional investors are showing interest in the cryptocurrency space, and if Morgan Stanley doesn’t gain enough exposure, they could end up sitting on the sidelines.
Morgan Stanley hired Andrew Peel last month according to eFinancialCareers. Peel will be serving as the new “head of digital asset markets” and he working be working out of the firm’s Zurich and London offices.
Morgan Stanley ranks sixth among U.S. banks with $858 billion in total assets.
It is still not clear what role will Peel play by heading their digital asset division, but it is possible that he would be researching ways to bring exposure in a strategic way so that the firm could test waters before investing heavily in the cryptocurrency space.
It is interesting to see how so many firms that were criticizing cryptocurrencies in the past are now turning around and offering their clients to trade bitcoin and other cryptocurrencies. Take BlackRock for example, the CEO of the firm criticized cryptocurrencies at every chance he got. But they conceded that the crypto market has grown so much in a very short amount of time, and more and more investors are interested in this new asset class, and they simply cannot ignore it.
Goldman Sachs is another example who recently announced that they will be launching bitcoin trading desks.
Morgan Stanley is one step ahead of Goldman Sachs in that regard, and they have started helping their clients trade bitcoin futures in January this year. This was just a month after the firm began trading on Chicago-based exchanges CBOE and CME.
And just like almost every other investment bank, the CEO of Morgan Stanley, James Gorman, also made some conflicting statement about his perspective on cryptocurrency. He said that bitcoin is a “fascinating development” and it is certainly “more than a fad.”
While Gorman made those comments, Morgan Stanley analysts, on the other hand, argued that it is highly possible that the price of bitcoin and many other cryptocurrency assets could crush to zero and it is a poor hedge against inflation. The analysts say that the bitcoin’s price movements are very similar to the dot-com bubble in 2000.
But I disagree with that argument because if the governments all around the world are incorporating cryptocurrencies in their banking systems and even using the underlying DLT technology in their administrative services, it is very unlikely that the prices of cryptocurrencies will crash to zero. We will just have to wait and see.