By Kenneth Corbin

Ultrawealthy Morgan Stanley Wealth Management clients can quickly tap their crypto holdings to invest in exchange-traded products thanks to a new partnership the Wall Street giant has struck with the financial services company Galaxy Digital.

Under the arrangement, wealthy investors seeking to diversify or potentially liquidate their Bitcoin, Ether, or Solana holdings will be able to convert those positions into spot crypto funds that resemble more traditional securities.

Converting directly held crypto to exchange-traded products is a tactic wealthy investors could use to consolidate more of their assets within a single account. Since those exchange-traded funds resemble traditional financial instruments, they can also serve as collateral for securities-based lending if the investor is seeking to raise cash.

There is a significant caveat in the form of a $5 million transaction minimum. However, were wealthy crypto holders to approach Galaxy Digital or one of the other companies that facilitates the conversion of directly held crypto into an exchange-traded fund, they would likely encounter a transaction minimum of $25 million or more.

For the relatively small subset of Morgan Stanley clients with that much directly held crypto, exchanges through Galaxy Digital will be dramatically streamlined. Clients will still need to create a new account with Galaxy, but the direct referral from Morgan Stanley can accelerate the crypto conversion, which could otherwise exceed four weeks, by up to 75%, Morgan says.

Morgan Stanley has an existing relationship with Galaxy Digital, which helps support its alternate investment platform.

The move is the latest of Morgan Stanley's many forays into digital assets. In April, the firm brought its spot Bitcoin fund, Morgan Stanley Bitcoin Trust, to market. (Morgan Stanley is still waiting for regulatory approval of its proposed Solana fund. The company declined to comment on how that process is progressing.)

Then last month, Morgan Stanley began allowing limited crypto trading on its E*Trade platform, though direct crypto holdings in advised accounts through Morgan Stanley Wealth Management are still not permitted.

The Galaxy Digital partnership represents an attempt to help clients "integrate digital assets into their portfolio," says Alison Nest, head of investment solutions products at Morgan Stanley Wealth Management. "This referral arrangement represents a significant step forward in bridging traditional finance and decentralized finance, providing more investors with streamlined opportunities to diversify."

The Securities and Exchange Commission laid the groundwork for the new partnership last July, when it approved the exchange of directly held crypto assets for in-kind holdings in spot crypto funds that trade on exchanges. That means that the conversions are limited to crypto funds, so couldn't exchange crypto for, say, mutual funds or other more traditional exchange-traded products.

From Morgan Stanley's perspective, enabling investors to more easily exchange their direct crypto holdings should bring more assets under the management of its advisors, who in turn stand to gain a more holistic picture of their clients' holdings.

Transaction fees for the crypto exchanges range from 15 basis points to 25 basis points, according to Morgan Stanley.

iShares Bitcoin Trust ETF is the largest Bitcoin spot ETF, with $49 billion in assets, according to Morningstar. It's down 27% year to date amid a broader selloff in cryptocurrencies this year.

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

June 05, 2026 08:15 ET (12:15 GMT)

Copyright (c) 2026 Dow Jones & Company, Inc.