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▲ Bitcoin (BTC)
Wall Street giant Morgan Stanley has officially opened the door to Bitcoin investment for its wealthy clients. However, its internal legal documents reveal a dual stance, warning of market manipulation and security vulnerabilities, thus requiring investors to exercise extreme caution.
According to a video uploaded on May 5 (local time), Louis Raskin, host of the cryptocurrency YouTube channel Coin Bureau, highlighted the news that Morgan Stanley, a colossal bank with $9.3 trillion in assets under management, recently launched the Morgan Stanley Bitcoin Trust (MSBT). This product, which charges lower fees than BlackRock's IBIT, attracted approximately $192 million in funds within a month of its launch and holds 1,834 BTC, achieving a performance in the top 1% among new investment funds. This change is a dramatic shift compared to its past stance in 2017 when it criticized Bitcoin (BTC) as worthless.
Raskin pointed out that, unlike the promotional press releases made public, the prospectus submitted to the government contains the harsh truth of how Wall Street views the virtual asset market. In the prospectus, Morgan Stanley stated that Bitcoin is exposed to manipulative trading activities occurring on unregulated exchanges, and its legal status remains unclear. This is an instance where the bank officially acknowledged structural flaws in the market in a formal document to protect itself from potential future legal disputes.
Specifically, Morgan Stanley explicitly warned that illegal activities such as wash trading and spoofing orders could distort Bitcoin's actual price. Raskin cited some research results, suggesting that 60% of unregulated exchange trading volume might be fake, and presented data analysis indicating that funds flowing into crime-related addresses could reach $154 billion by 2025. The bank has, in effect, legally notified its clients that the current Bitcoin price may not reflect actual supply and demand.
The prospectus also included security risks such as the permanent loss of assets if private keys are lost, the threat of quantum computers, and liquidity risks where withdrawals could be frozen during a crisis. The FTX bankruptcy in 2022 and the $1.5 billion Ethereum (ETH) hacking incident by the Lazarus Group in February 2025 prove that these warnings are not merely theoretical. Furthermore, the concentration of 84% of US Bitcoin spot ETF assets in a single entity was identified as a factor that actually undermines the security of virtual assets.
Ultimately, the entry of giant financial institutions into the market is less a genuine recognition of the value of virtual assets and more a strategic choice responding to client demands for fee revenue. Major banks, including Morgan Stanley, recommend investing only a very small proportion, between 2% and 4%, of client portfolios, clearly indicating Bitcoin's speculative nature. Since investment products offered by institutions only add intermediary risk and do not resolve the inherent flaws of the market itself, investors must thoroughly analyze the warning messages hidden behind flashy headlines.
*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*
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