Key highlights:
- Morgan Stanley has begun creating its own crypto products, signaling a deeper shift in institutional involvement.
- Institutional capital is now starting to outweigh retail trading in shaping crypto market structure.
- Regulatory changes and macro trends are pushing big investors toward digital assets for diversification.
Morgan Stanley is helping drive a second wave of institutional adoption in crypto, as major financial firms move beyond simply offering access to digital assets and begin building their own crypto products. According to Binance Research, crypto markets are entering a new structural phase in which institutional capital flows increasingly shape price action and liquidity.
This marks a shift from earlier cycles that were dominated by retail speculation. Today, long-term capital from large institutions is starting to redefine how the crypto market functions.
A structural shift in the crypto market
Despite a muted finish to 2025, Binance Research says a deeper transformation is underway. The market is gradually moving away from short-term retail trading toward long-term institutional positioning.
Weekly and yearly performance of crypto compared to traditional assets.
Two forces are driving this change. The first is accumulation by sovereign wealth funds in developing economies. The second is growing legislative support in the United States aimed at building strategic digital asset reserves.
After spot Bitcoin ETFs were approved in early 2024, crypto entered what analysts now call a “second wave” of institutional adoption. Unlike the first wave, which focused mainly on access and distribution, this phase involves active product creation by traditional financial firms.
Morgan Stanley changes the rules
The clearest signal of this shift is Morgan Stanley’s recent S-1 filings for both a Bitcoin ETF and a Solana ETF, as reported by Coinpaper. This shows that major Wall Street institutions no longer want to just sell crypto products, they want to design and control them.
Year-to-date indexed performance of major digital assets.
This move could pressure competitors like Goldman Sachs (GS) and JPMorgan (JPM) to follow. As asset management becomes more competitive, firms that delay entering crypto product development risk falling behind.
Pressure eases for crypto-holding companies
Another important development involves companies that hold cryptocurrency on their balance sheets, often referred to as DAT companies. These firms recently faced the risk of being removed from the MSCI index, which could have triggered roughly $10 billion in forced selling.
That threat eased when MSCI said it would not remove these companies from its index, at least for now. The decision helped reduce short-term pressure across the sector.
Binance Research also points to supportive macro conditions. Investors are slowly rotating out of expensive tech stocks, especially those boosted by the AI boom.
In 2025, just 10 companies accounted for about 53% of the S&P 500’s total growth. This concentration has raised concerns about crowding risk. As a result, some investors are looking beyond mega-cap tech for diversification.
Digital assets may benefit from this shift. As institutions search for alternatives, crypto is increasingly viewed not as a fringe asset, but as part of a broader long-term portfolio strategy.
Source:: Binance Research: Morgan Stanley Leads the Second Wave of Crypto Adoption