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The growing demand for digital currency products from institutional investors is rising, and major US banks including Morgan Stanley hope to catch the train on time.
New York-based multinational investment bank and financial services company Morgan Stanley (NYSE: MS) is reportedly interested in acquiring shares in the South Korean cryptocurrency exchange Bithumb. As reported by local media channel Aju news, the financial services behemoth is in talks with Bident, a major shareholder of Bithumb who has about a 10% ownership stake.
The decision to give up ownership stakes in Bithumb by its top shareholder, Lee Jung-hoon, takes precedence from the probe of authorities into the exchange’s financials, a situation that led to successive raids on the firms operating base by the South Korean Police in 2020. With Lee’s more than 40% stake up for grabs, various companies, both home and abroad had been making their intentions known.
One of the alleged early bidders, a South Korean-Japanese video game publisher Nexon Co Ltd (TYO: 3659) has refuted all media claims linking him to the acquisition deal, valued at $460 million. The intentions by Morgan Stanley according to the reports citing sources familiar with the matter are based on laying out an offer to Bident whose lower stake will prompt it to be open to favorable negotiations.
According to the reports, Morgan Stanley is pursuing only flexible options and is open to either helping Bident to increase its stake or to buy-out the firm’s holdings with a planned investment of between 300 and 500 billion Korean won ($254 million to $441 million).
“The reason Morgan Stanley used Bident is that it understood that Bident has the right to negotiate a preferred sale to acquire Bithumb Holdings,” said one of the anonymous sources familiar with the matter, as reported by Cointelegraph.
Morgan Stanley amid the Bithumb Push
The growing demand for digital currency products from institutional investors is rising, and major US banks including Morgan Stanley hope to catch the train on time. The Bithumb exchange acquisition report is the sequel to the news break about the bank’s proposed product to give access to its rich clients to invest in and own Bitcoin directly through three Bitcoin funds.
While neither Morgan Stanley nor Bithumb has confirmed the show of interest from the former, the ownership bid is undoubtedly in line with the bank’s latest agenda to take the bull by the horn and help ride the cryptocurrency race on its journey to mainstream adoption.
The entire cryptocurrency market is still in its infancy, with enough room for growth, and according to a recent report from German multinational investment bank and financial services company, Deutsche Bank AG (ETR: DBK), Bitcoin’s $1 trillion market capitalization has made it difficult to ignore the burgeoning asset class, and by extension, the host of other emerging altcoins out there.
The bid for Bithumb, per Market analyst Joseph Young, places the company at a $2 billion valuation.