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The U.S. bank will deal in contracts that give investors synthetic exposure to the performance of Bitcoin. Investors will be able to go long or short using the so-called price return swaps, and Morgan Stanley will charge a spread for each transaction.
Wall Street’s biggest banks are pushing ahead with plans to offer sophisticated derivatives tied to digital assets, even as the market value for cryptocurrencies collapses beneath them. Goldman Sachs Group Inc. and Citigroup Inc. are also preparing new products tied to Bitcoin, which has lost more than half its value this year. Morgan Stanley does not plan to trade Bitcoin directly and its swaps are tied to Bitcoin futures contracts, the person said. Chief Executive Officer James Gorman said earlier this year that the bank wouldn’t let customers buy and sell cryptocurrencies directly through Morgan Stanley, but would instead build a trading desk to support various derivatives tied to digital assets.
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