By
Bena Ilyas
April 18th, 2024
Amid Bitcoin market volatility, Morgan Stanley acquires 28,000 GBTC shares getting exposure to the world’s largest crypto. The Wall Street bank has produced strong results and doubled its dividend for the third quarter.
As per the recent SEC filing, banking giant Morgan Stanley (NYSE: MS) purchased 28,000 shares of the Grayscale Bitcoin Trust (GBTC). The recent purchase comes through the bank’s Europe Opportunity Fund.
The recent purchase comes when Bitcoin has been showing a sideways movement over the last week. This purchase will somewhat help to instill confidence among Bitcoin investors who have been sitting on the edge recently.
The banking giant has been working around offering Bitcoin exposure to its institutional clients. Back in April 2021, Morgan Stanley announced BTC exposure to 12 of its mutual fund portfolios. Morgan Stanley allowed its clients BTC exposure through the Grayscale Bitcoin Trust as well as the cash-settled futures contracts.
As per the SEC filings back then, each of these funds could gain up to 25% exposure to Bitcoin. The Europe Opportunity Fund, via which Morgan Stanley purchased the GBTC shares, has a mix of Europe-based companies in the tech and the non-tech space.
Morgan Stanley Doubles Quarterly Dividend
On Monday, June 28, the banking giant announced that it would double the quarterly dividend for investors along with a $12 billion stock repurchase plan with an execution timeline of June 2022. Morgan Stanley said that it will up its dividend to 70 cents a share during the third quarter. In the press release accesses by CNBC, Morgan Stanley CEO James Gorman wrote:
“Morgan Stanley has accumulated significant excess capital over the past several years and now has one of the largest capital buffers in the industry. The action taken by the Board reflects a decision to reset our capital base consistent with the needs we have for our transformed business model.”
As of press time, the MS shares are 2.71% in the after trading hours quoting at a price of $90. the recent decision to double dividends comes amid a number of Wall Street banks taking similar measures.
Banking giant JPMorgan Chase & Co (NYSE: JPM) boosted its dividend by 11% to $1. Similarly, Bank of America (NYSE: BAC) said that the dividend would rise 17% to 21 cents. Back in April 2021, BoA already announced a $25 billion stock repurchase plan. Subject to approval from the bank’s board, Goldman Sachs Group Inc (NYSE: GS) is also willing to boost its dividend offers by 60% to $2 per share.
Last week, US central bank – Federal Reserve – released the results of the 2021 stress test. It noted that all 23 banks in the sector hold “well above” the required capital in case of an economic downturn. The test proves a key milestone for American banks that have been under major stress over the last year’s pandemic.