Morgan Stanley CEO says crypto is not a fad
Positive statement on bitcoin comes in same week Jamie Dimon calls it ‘worthless’
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Your support makes all the difference.The chief executive of Morgan Stanley says that cryptocurrency is not a fad and is not going away.
James Gorman, head of the investment bank and financial services company, made the statement in an earnings call on Thursday morning.
He did admit that the bank is not seeing much client demand yet for crypto products and services.
“I don’t think crypto’s a fad, I don’t think it’s going away,” said Mr Gorman during the bank’s third-quarter earnings call.
“I don’t know what the value of bitcoin should or shouldn’t be, but these things aren’t going away and the blockchain technology supporting it is obviously very real and powerful.”
Morgan Stanley is not directly trading cryptocurrency for retail clients, but it does offer investors ways to buy crypto through various funds, explained Mr Gorman.
The bank offers wealth management clients exposure to bitcoin through two external crypto funds limited to individual investors with at least $2m or firms with $5m. There is a cap on investment in bitcoin of 2.5 per cent of an individual’s net worth.
Chief financial officer Jonathan Pruzen said in April during the bank’s first-quarter earnings call: “As we see more interest, we’ll work with regulators to provide services we think are appropriate.”
As yet, that interest is yet to materialise.
“For us, honestly it’s just not a huge part of the business demand for our clients,” said Mr Gorman.
“That may evolve and will evolve with it, but certainly it’s not what’s driving our economics one way or the other.”
Earlier this week Jamie Dimon, CEO of JP Morgan Chase, called bitcoin “worthless”.
He added though that this was his personal opinion and that the bank’s clients are adults and can make their own decisions.
“I don’t think people should smoke cigarettes,” he added, noting that the bank will facilitate transactions, but will not hold bitcoin.
It was not the first time Mr Dimon has voiced his disdain for cryptocurrency. In 2017 he referred to it as a “fraud”, adding that it was “stupid” and far too dangerous”.
Mr Dimon is not against all digital currencies and is in favour of those that run on a blockchain network, particularly if they are a “stablecoin” — those pegged to the US dollar or another government-backed currency.
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