Morgan Stanley is the latest to join the cryptocurrency bandwagon as it has confirmed that it has started processing client requests for bitcoin futures contracts.
The investment bank’s chief financial officer, Jonathan Pruzan, said the firm has been clearing Bitcoin futures trades made on CBoE and CME Group. In an interview with Bloomberg, Pruzan said that they are helping out clients who want to trade on the bitcoin futures and settle in cash. He also added that while they have started helping clients with bitcoin futures, there isn’t a lot of activity on that front and only a few big institutional investors have approached them in this regards.
One of the primary reasons why the Wall Street is refraining from full-blown cryptocurrency trading and involvement is the nerve-wracking volatility that comes with the asset class.
According to Bloomberg the only other bank offering to clear them at the moment is Goldman Sachs which demanded that clients set aside funds equal to the full value of their Bitcoin futures trade as a condition for clearing the transaction. This may have deterred many of them from entering such highly leveraged contracts. It is likely that Morgan Stanley will also require some margin level, however, Pruzan declined to say how much this would be.
There are large brokerage firms that have already started allowing their clients to deal in bitcoin futures contracts, but there are those who might still be holding off and analyzing the volatility as the current week’s crypto bloodbath wiped off $400 billion from the market.