Fresh from a crash following news that Goldman Sachs Group Inc. has abandoned plans to establish a bitcoin desk, a swing back to positive crypto news resumed Thursday with a report claiming that Morgan Stanley is planning to offer bitcoin derivatives.

Bloomberg, quoting a person familiar with the matter, claimed that the merchant bank is planning to “offer trading in complex derivatives tied to the largest cryptocurrency.”

The product is planned to give investors synthetic exposure to the performance of bitcoin along with the ability for investors to go long or short using the so-called price return swaps. Morgan Stanley would charged a spread for each transaction.

Unlike Goldman Sachs’ plans, Morgan Stanley’s bitcoin product will offer swaps tied to bitcoin futures contracts, which are legal. That likely will overcome any potential regulatory concerns, though as with all new financial products, it will still require approval.

The report didn’t provide a potential debut date but noted that the plans are well advanced. The bank hired Andrew Peel as head of digital asset markets from Credit Suisse Group AG in June. The product “will launch once there is proven institutional client demand and after the completion of an internal approval process,” an insider claimed.

The news came on top of a report Sept. 10 that Citigroup Inc. is designing a new financial product that will allow customers to trade in bitcoin and other cryptocurrencies without owning them.

The “digital asset receipt” is said to operate in a similar way to an American depositary receipt and would allow investors to acquire DARs that hold, via a custodian, a given amount of cryptocurrency.

The news from Citi and Morgan Stanley helped bring back some positive sentiment to cryptocurrency markets with bitcoin trading at $6,521.61 as of 10:35 p.m. EDT, up from a monthly low of $6,190.15 on Sept. 10.

Photo: Alex Proimos/Wikimedia Commons