Morgan Stanley has recently released a report about its future with crypto markets. This report gives us a considerable hint about how the Bitcoin market is changing over the years. Some moves were very visible like the bull sentiment of 2017 and the bear downtrend of 2018. However, some other moves remain somewhat considerably away from the public eye.
To understand this change, we have to go back to 2008 when the financial crisis happened and Bitcoin was created by the mysterious yet so famous Satoshi Nakamoto. Bitcoin, as we all know, was hailed as a new alternative to the financial system. A new store of value. Basically, digital gold, if you want.
It is important to notice this because of all hardcore Bitcoin evangelists who declare that the asset is the ultimate store of value. Why? Because Stanley Morgan is saying the opposite and it actually makes a lot of sense when you consider all the surrounding climate surrounding Bitcoin.
The report from Morgan Stanley talked how the company did not believe in Bitcoin as a store of value but as an institutional asset class set to take on trading instead. This means that the volatility, which is something that prevents Bitcoin from being used as “real” money by most people is, to Morgan Stanley, a feature, not an issue.
When you consider that the institutional market is set to save Bitcoin from its gloomy doom since the crash, it actually makes a lot of sense. Institutional investors are in for the profit and they want it quicker if they can. Volatility up and down is pretty important if you want to make a buck with arbitrage.
The institutional market needs volatility. Remember how Satoshi was very anti-establishment? Well, institutional investors are the establishment. There is money to be made on speculation and these guys do not care whether they will actually destroy Bitcoin’s original dream while “saving it”. They want to profit. That’s the free market for you, folks.
Does This Actually Mean Something? What’s Morgan Stanley’s Future?
Yes and no, really. While this shift has severe implications for the crypto market outside these big institutions, they are not the whole market. The good thing about an open market is that everybody can try their game on it despite the so-called whales and institutional investors being too powerful in their decisions.
The Abacus Journal has reported on this story and their stance is somewhat similar to mine. They also noticed how offensive it can be for hardcore Bitcoin believers to see that the big institutional players are taking over the market. It was also reported by their sources that the company is focused on creating several products to please the hungry investors and their demands.
Morgan Stanley has three main initiatives for its future. The first one is to create an institutional trade desk that will handle future, OTC markets and NDF products for Tier 1 institutions in the market.
The second one is about futures. There has been a very long discussion inside the company on to whether they should use Intercontinental (ICE)’s Bakkt exchange for futures or not.
The third is about the trading divisions of the company and whether they will back a Bitcoin NDF or not as well as an Ethereum-based product, something that Goldman Sachs has also shown some interest about so far.
Other products like the so awaited Bitcoin ETF and other SEC-based products were also discussed at the meetings. They also discussed whether to simply copy the other institutional and launch similar products or to create their own competitive products with premium fee structures.
Something interesting is that no one was, according to the Abacus Journal, discussing whether crypto-based products are sustainable or if they are just a fad. They are here to stay. The clients liked them and regulations will make the market more secure in the future. Everybody is projecting a huge adoption (at least for institutional investors) and another bull run for 2019.
The company believes in the mass adoption of cryptos in 2019 and that trading volume will skyrocket after the regulations are passed in the United States.
There is a clear fear of missing out among banks now and everybody is set to surf on the next bull run. Nobody wants to lose this kind of money. Morgan Stanley is set to turn Bitcoin into some very important asset class now and it is confident about its future.
However, you, our long-time reader (or maybe just a new retail investor) will profit as much as these big institutions? That is, to me, the whole big question. These companies are very hyped about using volatility and transforming Bitcoin into something else. Is this the future? And, even if it is, is it the future that we want?
Independently on whether this is the future that we want or not, it looks like this is the future we will have. Without the big players Bitcoin could have died out in 2018, but it is still standing strong. It just looks like Satoshi’s dream of creating an alternative decentralized currency is maybe not so real anymore and Bitcoin will turn into another “traditional” financial asset for big players.
Follow our blog to know more about the future of Bitcoin and whether or not Satoshi’s dream will ever become a reality.