A great price to challenge the competition

Morgan Stanley filed an amendment with the SEC on Friday to launch its spot ETF #bitcoin , named Morgan Stanley Bitcoin Trust (MSBT), with annual fees set at 0.14%. This level immediately places the bank's offering at the forefront of the American market in terms of pricing competitiveness, even surpassing the Grayscale Bitcoin Mini Trust ETF, which already features a very aggressive rate of 0.15%.

With this positioning, #MorganStanley size also has a significant margin over the giant BlackRock, whose iShares Bitcoin Trust (IBIT) currently charges 0.25% per year. In a sector where fees have become a central argument to attract flows from institutional and individual investors, this announcement redefines expectations and puts pressure on historical players.

According to coindesk.com, this would be the first Bitcoin spot ETF issued directly by a major U.S. bank if the SEC gives its green light. The New York Stock Exchange has already issued a listing notice for the MSBT, indicating that the launch could take place in the coming weeks.

The major U.S. bank enters the arena

Morgan Stanley is not content with just a pricing spectacle. With nearly 16,000 financial advisors and over $6.2 trillion in assets under management, the bank has considerable clout to democratize access to Bitcoin through regulated products. This direct entry of a major banking player into the crypto ETF space marks a significant step in normalizing digital assets among traditional investors.

MSBT will be backed by physical bitcoin held at Coinbase as the primary custodian, while Bank of New York Mellon will handle the administration and liquidity custody.


The latest S-1 filing from Morgan Stanley was submitted to the SEC on Friday, March 22, 2024.

This reassuring structuring aims to meet regulatory requirements while providing direct exposure to the bitcoin price. Since the beginning of 2024, U.S. Bitcoin spot ETFs have already attracted over $50 billion in net inflows, signaling growing enthusiasm despite the persistent market volatility.

Grayscale and BlackRock under pricing pressure

The fee war takes on a new dimension with Morgan Stanley's offensive. The Grayscale Bitcoin Trust (GBTC), long the uncontested leader in the sector with nearly $29 billion in assets during its conversion to ETF last January, has seen its assets shrink to around $10 billion today. This decline is particularly attributed to its fees being deemed too high compared to emerging competition.

The arrival of the MSBT at 0.14% intensifies this pressure: #BlackRock⁩ must now contend with a direct competitor offering cheaper exposure to bitcoin by 11 basis points. Institutional investors are particularly sensitive to these discrepancies in the long term, further accelerating arbitrage between competing products.

James Seyffart, an ETF analyst at Bloomberg quoted by theblock.co, describes this pricing choice as a "big move" and estimates that a launch could happen as early as the beginning of April if the regulatory process goes smoothly.

A launch that could change everything

If the SEC validates the registration of the MSBT in the coming weeks, Morgan Stanley will become the first major U.S. bank to directly offer a Bitcoin spot ETF listed on the U.S. market.

Morgan Stanley targets traditional investors

Beyond reduced fees and banking prestige, Morgan Stanley is betting on its ability to leverage its vast network to attract clientele that has been hesitant toward unregulated crypto platforms. The recent appointment of Amy Oldenburg to head the digital asset team at the end of January illustrates this strategic intent to sustainably integrate digital assets into the traditional wealth management offering.

The bank does not limit its ambitions to just bitcoin: it also filed in early January for an ETF #solana ($SOL ) as well as a staked Ether (ETH) ETF. This diversification reflects a comprehensive approach aimed at offering different entry points into the crypto market through regulated instruments accessible to both traditional and institutional investors.

Milestones

  • Morgan Stanley offers a Bitcoin spot ETF (MSBT) with annual fees of 0.14%, the lowest in the U.S. market.

  • The latest S-1 filing for the MSBT was submitted to the SEC on Friday, March 22, 2024.

  • If approved, this would be the first Bitcoin spot ETF issued directly by a major U.S. bank.

Upcoming risk factors

The SEC's approval of the Morgan Stanley Bitcoin Trust (MSBT), which has received a listing notice from the New York Stock Exchange and offers fees of 0.14%, remains uncertain at this stage; if it occurs, this would be the first Bitcoin spot ETF issued directly by a major U.S. bank, which could immediately alter the competitive dynamics in the bitcoin ETF market.