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In an SEC filing placed on March 31, Morgan Stanley revealed 12 of its existing institutional funds could take steps to gain exposure to Bitcoin using cash-settled futures and investments with the Grayscale Bitcoin Trust. 

Morgan Stanley also detailed which funds could take on this new Bitcoin exposure, as well as how the investments will be implemented. 

"To the extent a Fund invests in bitcoin futures or GBTC, it will do so through a wholly-owned subsidiary, which is organized as an exempted company under the laws of the Cayman Islands. A Fund may at times have no exposure to bitcoin," the filling reads.

Morgan Stanley's move showcases a growing faith in Bitcoin as an asset class that is ready for institutional investment. That said, its filing further highlights areas of risk that these funds could experience as a result of exposure to the volatile Bitcoin market.

Morgan Stanley notes in its filing that "bitcoin and bitcoin futures have generally exhibited significant price volatility relative to traditional asset classes."

It is also said that "the risks of investing in GBTC are similar to the risks of investing in cryptocurrencies generally. Investments in GBTC expose a Fund to all of the risks related to bitcoin discussed below and also expose the Fund to risks specific to GBTC."

The filing goes on to mention that these funds "may gain exposure to bitcoin and other assets by investing up to 25% of its total assets in a wholly-owned subsidiary of the Fund organized as a company under the laws of the Cayman Islands."

Each of these subsidiaries may invest in the Grayscale Bitcoin Trust, cash-settled Bitcoin futures or other investments related to Bitcoin. These funds range from under $2 million of total assets to over $900 million in assets, making the potential indirect Bitcoin investment for institutional investors quite large.