Investment bank Morgan Stanley is reportedly planning to offer Bitcoin swap trading.
According to an unnamed source talking to Bloomberg today, the New York City-based banking giant will offer investors the opportunity to bet on bitcoin-related derivatives using ‘price return swaps.’
Importantly these potential swaps do not involve trading the underlying asset - BTC - but are swaps tied to bitcoin futures contracts.
The source confirmed that the bank is already prepared for the offering and will launch once they have clear institutional demand for the new products - although a spokesperson for Morgan Stanley declined to comment.
Institutional Interest Growing
If the reports are confirmed, this latest offering will add to the expanding list of wall street heavyweights getting involved in the cryptocurrency derivatives market.
Goldman Sachs in particular have featured prominently in the news with respect to the digital asset market recently, as reports emerged on September 5th that the investment bank had cancelled its plans to open a bitcoin-trading operation - a move which would allwo investors to trade derivatives tied to the world’s largest cryptocurrency.
Possibly contributing to a slump in the BTC price of over 5%, Goldman CFO Martin Chavez subsequently denied the claims, describing the reports as “fake news.”
Other wall street banks such as CitiGroup Inc. also interested in the space, and significantly, quarterly volume in CME bitcoin futures - a benchmark of instituitonal interest - is growing substantially:
Bitcoin futures average daily volume in Q2 grew 93% over previous quarter, while open interest surpassed 2,400 contracts, a 58% increase. Learn more about trading #Bitcoin futures: https://t.co/adjWVWXBPQ pic.twitter.com/UQWC3nGGrI— CMEGroup (@CMEGroup) July 20, 2018
This latest report comes after Morgan Stanley appointed Andrew Peel - formerly of Credit Suisse - to head their digital assets markets division last month.
With Morgan Stanley CEO James Gorman in January voicing his opinion that bitcoin was "not going away," this latest news - if confirmed - would seem to corroborate the bank’s seriousness about trading in the space, despite the price fluctuations in the underlying asset.