Public Event Detail
Morgan Stanley’s Galaxy deal points to Bitcoin’s next institutional test: lending collateral
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Event summary
Morgan Stanley's recent deal with Galaxy Digital, enabling wealth clients to lend Bitcoin, Ethereum, or Solana for spot crypto ETP shares, signals a new phase in institutional crypto adoption focused on lending collateral. This move, facilitated by the SEC's July 2025 approval of in-kind ETP creations, integrates crypto into traditional banking structures, making it marginable and reportable. The article discusses three models for institutional crypto exposure: ETP collateral (most bank-friendly), direct crypto collateral (more structural leap), and tokenized collateral substitution (potentially most durable), highlighting the evolving landscape and the inherent risks of volatility and deleveraging cycles.