When it comes to crypto, Morgan Stanley head James Gorman is differentiating himself among some other CEOs of top U.S. banks. During a CNBC interview Thursday, Gorman said that he doesn’t know what will happen with the price of Bitcoin but he knows one thing: “It’s not a fad…it’s not going away.”
By comparison, Jamie Dimon, chairman and CEO of the largest U.S. bank, recently reinforced his crypto-skepticism by saying, “I personally think Bitcoin is worthless.” The JP Morgan leader has been accused of failing to understand the cryptocurrency.
“Gorman’s take on bitcoin and Ether … feels miles from his counterpart,” wrote MarketWatch markets editor Mark DeCambre.
Dimon made the latest in a long line of comments skeptical about crypto while speaking during the virtual Institute of International Finance (IFF) annual membership meeting. He acknowledged that JP Morgan clients disagree with his views on crypto and the bank will cater to those who wish to buy and sell Bitcoin.
“I don’t want to be exposed to it but I don’t care, it makes no difference to me,” Dimon said. “I don’t think you should smoke cigarettes either. Our clients are adults. They disagree. That’s what makes more markets. So if they want to have access to buy or sell Bitcoin, we can’t custody it, but we can give them legitimate, as clean as possible access.”
Starting in July, JPMorgan allowed advisors to trade in four cryptocurrency products from Grayscale Investments and one from Osprey Funds. In August, JPMorgan started selling an in-house Bitcoin fund to ultra-rich clients in its private bank unit, FinancialAdvisorIQ reported.
Morgan Stanley was among the first traditional financial services firms to introduce crypto investing for clients, introducing NYDIG and two other Bitcoin-linked funds in March. The company has since formed a new research team focused on cryptocurrencies.
Listen to GHOGH with Jamarlin Martin | Episode 74: Jamarlin Martin Jamarlin returns for a new season of the GHOGH podcast to discuss Bitcoin, bubbles, and Biden. He talks about the risk factors for Bitcoin as an investment asset including origin risk, speculative market structure, regulatory, and environment. Are broader financial markets in a massive speculative bubble?
Gorman discussed how companies and investors are trying to figure out whether or how crypto assets fit into a balance sheet in an investment portfolio. “Nobody’s putting 10 percent of their portfolio into it…it’s not a core part of their diversification strategy…it is an option” they are looking at, he said.
During Morgan Stanley’s third-quarter earnings call with analysts last week, Gorman said, “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.”
Gorman added that Morgan Stanley is giving clients access to cryptocurrencies through various funds but isn’t directly trading it for them, Bloomberg reported. He also said that it wasn’t a large part of the business. “We’re watchful of it, we’re respectful, and we’ll wait and see how the regulators handle it.”