Morgan Stanley has started offering loans secured by spot Bitcoin ETF holdings, with a loan-to-value ratio of 50%. The move makes the Wall Street giant the first major U.S. bank to treat spot Bitcoin ETF shares as collateral for personal lending.
How the loans work
Borrowers can pledge shares of spot Bitcoin ETFs they already own to get cash. The 50% LTV means someone with, say, $100,000 in ETF shares could borrow up to $50,000. If the value of the underlying Bitcoin drops, the bank could hit a margin call, forcing the borrower to add collateral or repay part of the loan. Interest rates aren't disclosed, but the product is structured like a conventional securities-backed line of credit.
A first for a big U.S. bank
Until now, most U.S. lenders have stayed away from crypto collateral. A handful of smaller crypto-friendly banks and non-bank lenders offered similar products, but this is the first time a top-tier Wall Street firm has stepped in. The decision signals that Morgan Stanley's risk committee sees spot Bitcoin ETFs as liquid enough to backstop fairly conservative lending. The 50% LTV is notably lower than the typical 70–80% for stocks and bonds — a cushion that reflects the asset's volatility.
Why now?
The timing coincides with the maturation of spot Bitcoin ETFs, which launched in early 2024 and now hold billions in assets under management. With daily trading volume and stable net asset value calculations, the ETFs have become easier for banks to price and liquidate if needed. Morgan Stanley's move may push other large banks to follow, though so far no other major firm has announced a similar program.
Morgan Stanley hasn't said whether it will expand the offering to other crypto ETFs — such as those tied to Ethereum — or to direct crypto holdings. For now, only spot Bitcoin ETF shares qualify. Clients interested in the loans will need to go through their existing Morgan Stanley wealth advisors.
