x
--d : --h : --m : --s
Get tickets
Verified on Po.et Created with Sketch. Verified on Po.et

Morgan Stanley Eyes Bitcoin Swap Contracts Tied to Futures Prices

by

        Morgan Stanley Eyes Bitcoin Swap Contracts Tied to Futures Prices
Morgan Stanley Eyes Bitcoin Swap Contracts Tied to Futures Prices

Morgan Stanley is joining Wall Street’s race toward an institutional-friendly bitcoin derivative.

According to anonymous sources reporting to Bloomberg, the financial institution is devising price return swaps tied to bitcoin. These derivatives would allow investors to indirectly invest in the market’s flagship currency, allotting them the option to buy into long or short positions through the contracts.

Taking their prices from bitcoin futures, the swaps will not handle bitcoin directly. Seeing as Morgan Stanley is a regulated and established financial institution, tying the product to futures contracts is a safer bet than basing them on bitcoin’s spot price, as the Chicago Mercantile Exchange and Chicago Board of Exchange offer fully-regulated bitcoin futures from which Morgan Stanley can pool pricing data.

Bloomberg’s source claimed that the derivatives are ready for launch, but it’s waiting on an in-house approval process and sufficient investor demand before taking them to market. In the original reporting, a Morgan Stanley spokesperson declined to comment on the developments.

If the tip is valid, it would make Morgan Stanley the latest in legacy financial groups looking to open a doorway for institutional investors to enter the cryptocurrency market. Despite false reports claiming that Goldman Sachs had put hopes for a bitcoin strategy behind it, the bank has a strategy desk in the works, a service that, if opened, would add to the bitcoin futures options it facilitates for its clients.

Citigroup also reportedly has so-called digital asset receipts in the works. Like its traditional counterpart in American depository receipts, these receipts offer investors an option to purchase an asset that doesn’t trade on local markets from a foreign exchange.

Institutional-tier offerings such as those detailed above are seen as much-needed catalysts to stimulate the flow of institutional money into the market, offering heavyweight financial players a less-risky way to buy into assets like bitcoin. For the same reason, custody services like those offered by Coinbase, BitGo and others are necessary for safely storing and managing these investments as well.


Recommended

Cartoon: Obstacle Course

Getting the next 100 million consumers to start using cryptocurrencies is going to require simpler access methods.

Ian Foley

Bitcoin Price Analysis: Where Is the Local Top for This Parabolic Run?

The bitcoin market has gone parabolic as we blasted off through two major weekly levels. We are currently testing the $8,000 level and we might see a strong round of selling hit the market that could potentially pull us down to retest the mid-$6,000s. If we manage to crack the overhanging resistance and find support, we can expect to see further price growth.

Bitcoin Schmitcoin

In Light of Tether’s Fractional Reserve, a Shadow of Fiatcoins’ Future

What does Tether's 74 percent fractional reserve tell us about the future of so-called stablecoins?

Colin Harper

The SEC Has a New Exchange Traded Fund Application to Review

The SEC has posted a new proposal from Crescent Crypto Index Services for the launch of a crypto-backed exchange-traded fund.

Jimmy Aki