3rd August 2024 > > MS, MSTR, & HK.

tl;dr

MSTR continues to buy BTC. MS opens a new floodgate of cash for BTC. Hong Kong travels further down its path of crypto domination.

Market Snap

Market Wrap

Some terrible data from the US yesterday bakes in a rate cut in September, though events in the Middle East might bring that date forward, but in the meantime fears of an escalation hang heavy on all risk assets.

Curious Cryptos’ Commentary – MicroStrategy (MSTR)

MSTR announced Q2 earnings with a quarterly net loss of $123mm. More interestingly, the firm now owns 226,500 BTC worth nearly $15bn bought for just over $8bn. There will also be a $2bn equity raise, which will undoubtedly be used to buy more BTC.

The CC Treasury has been a regular buyer of MSTR since 2020. That looks a pretty good decision by the Treasury Committee as part of its strategically driven pivot into only owning cryptos and crypto related stocks.

Curious Cryptos’ Commentary – Morgan Stanley (MS)

MS is the largest of the wirehouses with $3.75 TRILLION of assets within its advisory network.

CNBC has this very welcome news:

“Morgan Stanley on Friday told its army of financial advisors that it will soon allow them to offer bitcoin ETFs to some clients, a first among major Wall Street banks, CNBC has learned.

The firm’s 15,000 or so financial advisors can solicit eligible clients to purchase shares of two exchange-traded bitcoin funds starting Wednesday, according to people with knowledge of the policy.”

This is the first big bank to take this step, bringing in up to nearly $200bn of fresh investment into BTC over the next twelve months. Until now, all the wirehouses refused to promote spot BTC ETFs to their retail client base. We should expect the likes of Bank of America and J.P. Morgan to copy MS’s lead in short order. Rob Hadick, general partner at Dragonfly Capital agrees with me:

"Now that changes with Morgan Stanley, and we'll almost certainly see the other largest banks follow suit. That will expand the marketable assets under management by over $10 trillion in the near term and even a small recommended allocation will result in significant net new inflows into those products."

Curious Cryptos’ Commentary – Hong Kong

Following recent regulatory changes, the largest online brokerage firm in Hong Kong - Futu Securities – is now offering its retail clients the opportunity to invest in BTC and ETH.

AUM at Futu at $10bn is tiny compared to the US banks above but, crucially, it is a possible conduit for mainland Chinese investors. Though there are currently restrictions in place, the pressure on Xi from his corrupt cabal that make up the delegates to the CCP will likely lead to a flood of money into Hong Kong’s financial services industry, a portion of which will be invested in cryptos..