Morgan Stanley lets clients lend crypto to Galaxy for ETP shares

Morgan Stanley announced Friday that its Wealth Management unit will let high-net-worth clients lend bitcoin, ether and solana to Galaxy Digital in exchange for shares in spot crypto exchange-traded products, including the Morgan Stanley Bitcoin Trust.

Under the arrangement, clients place crypto on loan with Galaxy and receive ETP shares in kind, avoiding a cash sale of digital assets. Morgan Stanley said in-kind conversions can shorten onboarding times for crypto-to-ETP transfers by up to 75%. Galaxy reduced its minimum lending transaction for Morgan Stanley-referred clients to $5 million from $25 million.

The program is offered through Morgan Stanley Wealth Management and targets clients who want regulated ETP exposure while retaining economic exposure to their crypto holdings. Converting crypto into fund shares in kind avoids an intermediate cash sale and the tax and market-impact effects that can come with liquidating digital assets.

Galaxy will act as the counterparty, accepting crypto on loan and supplying ETP shares to participating clients. Morgan Stanley did not disclose fees, custody arrangements or the full operational mechanics for how collateral will be handled and how shares will be delivered.

Morgan Stanley launched the Morgan Stanley Bitcoin Trust on April 8; the vehicle completed its first month without recording a day of net redemptions. The bank is piloting spot crypto trading through an E-Trade tie-up and introduced the Stablecoin Reserves Portfolio money market fund as part of its expanded digital asset offerings this year.

Galaxy reported $505 million in adjusted gross profit in 2025 from its trading, lending, asset management and staking units. The firm recently added an institutional over-the-counter prediction-market trading desk.

Alison Nest, Morgan Stanley’s head of investment solutions products, described the referral capability as an “institutionalized pathway” to integrate digital assets into client portfolios and noted it provides streamlined opportunities for investors to add regulated crypto products.