Eric Balchunas Says Morgan Stanley’s New Move Could Unlock ‘Boomer Money’ For Crypto

As rules on digital assets become less stringent, big banks are increasingly interested in adding crypto to their core services.

• Bloomberg ETF analyst Eric Balchunas said that even small investments from the "massive network of what he called 'Boomer money' could bring in fresh capital into digital assets.
• A 1% to 2% portfolio investment from older generations could generate tens of billions for digital assets, reiterated the analyst.
• Data from the Federal Reserve indicates that Baby Boomers and people over 70 own more than 80% of U.S. wealth, even though younger people are more likely to use crypto.

Eric Balchunas, Senior Analyst at Bloomberg ETF, had a strong reaction to Morgan Stanley's decision to apply for a national trust bank charter to hold digital assets. He said that this could open the door for a huge new group of investors to get into crypto.

On Friday, Balchunas wrote on X, "Wow, they're really going all the way," pointing out that the big Wall Street firm not only applied to hold digital assets but also has spot Bitcoin and Ether ETFs in the works. “Esp notable IMO given they have 16k advisors that manage $7T for 18 million people. It’s like a massive network of Boomer money.”

Bloomberg reported on Friday that Morgan Stanley has applied for a new national trust bank charter. This would allow the Wall Street giant to hold digital assets directly and greatly increase its presence in the cryptocurrency market.

An application filed with the Office of the Comptroller of the Currency (OCC) on February 18 says that the proposed entity would not only protect crypto assets but also trade them and offer staking services to the company's investment clients. The trust bank would be based in Purchase, New York, but would offer services nationwide.

Boomers Entering Crypto

Historically, crypto adoption has largely been directed towards younger people, even though the 62 to 80 age cohort is more financially stable. According to the Federal Reserve data on wealth distribution, U.S. wealth is heavily concentrated among older generations, with Baby Boomers and those over 70 holding over 80% of total wealth. 

Balchunas hinted that older people could get into the crypto space as Morgan Stanley's advisors build and manage portfolios for millions of clients, many of whom are close to retirement or already retired. A small investment of 1% to 2% of portfolios across a small part of the company's $7 trillion platform could bring in tens of billions of dollars for digital assets.

Morgan Stanley’s Steps Forward In Crypto Adoption

The company hired Amy Oldenburg as the head of digital-asset strategy in January. The bank had also applied for spot Bitcoin (BTC), Ethereum (ETH), and Solana (SOL) exchange-traded funds, indicating that it wanted to give its clients more options for getting into crypto. Morgan Stanley also worked with Zerohash to let E*Trade customers trade digital assets starting this year.

As of writing, Bitcoin (BTC) was trading at $65,677.09, down 3% in the last 24 hours. On Stoctwits, retail sentiment around BTC remained in the ‘neutral’ zone, accompanied by ‘low’ chatter levels over the past day. Ethereum and Solana were also down 5.7% and 6.9%, respectively, in the last 24 hours. 

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