Morgan Stanley’s Wealth Advisers to Recommend Bitcoin ETFs
According to recent reports, Morgan Stanley’s financial advisers will soon have the green light to recommend Bitcoin (BTC) exchange-traded funds (ETFs) to their clients. This move, effective from August 7, will see advisers recommending notable Bitcoin ETFs such as BlackRock’s iShares Bitcoin Trust (IBIT) and Fidelity’s Wise Origin Bitcoin Fund (FBTC). This development is seen as a significant leap for Bitcoin, given Morgan Stanley’s substantial management of approximately $3.75 trillion in client assets.
Bitcoin ETFs have experienced substantial success since their introduction in January, primarily attracting crypto-native retail investors and hedge funds. However, Morgan Stanley’s clientele extends far beyond Bitcoin’s usual investor base. Roxanna Islam, head of sector and industry research at VettaFi, highlighted that BlackRock’s and Fidelity’s spot Bitcoin ETFs have garnered interest from independent financial advisers.
Bitcoin Network Difficulty Reaches New Heights
The Bitcoin network has recently experienced a surge in difficulty, marking a new all-time high. For nearly three months, from May 9 to July 30, the network’s difficulty saw a noticeable decline, which reduced the computational power required to validate transactions on the blockchain. However, on July 31, the difficulty spiked, reaching an unprecedented level of 90.66 trillion on August 1, representing a 14% increase. This surge is likely to impact miners’ earnings negatively in the short term.
Amid this growing financial pressure, Bitcoin mining firms are holding onto their BTC rewards, hoping to sell them at a higher price in the future.
Ethereum ETF Inflows Turn Positive
Despite significant outflows from Grayscale’s Ethereum Trust, net inflows into U.S. spot Ether ETFs have turned positive. On August 1, eight recently approved spot ETFs reported a net inflow of $28.5 million, with BlackRock’s iShares Ethereum Trust (ETHA) leading the way with a $91.4 million inflow, according to FarSide Investors data. On the same day, Ethereum ETFs recorded a net inflow of $26.7 million.
Conversely, Grayscale’s Ethereum Trust saw outflows amounting to $78 million, pushing the cumulative outflows from the fund to over $2 billion since its conversion to a spot fund. Unlike the other eight spot ETH ETFs launched as new funds on July 23, ETHE was initially a trust offering institutional investors exposure to ETH before its conversion to a spot ETF on the same date. Before this transition, ETHE held $9 billion in Ether. The recent outflows indicate that 22% of the initial fund has been sold.
Several analysts suggest that the gradual reduction in outflows from Grayscale’s Ethereum Trust could signal a turning point for Ether’s price trajectory.
