Morgan Stanley launches Bitcoin ETF MSBT with $30.6 million inflows on first day

On April 8, Morgan Stanley became the first Wall Street bank to launch its own Bitcoin-tracking exchange-traded fund (ETF) under the ticker MSBT. The fund debuted on NYSE Arca and recorded $30.6 million in inflows on its first day, according to Farside Investors’ ETF monitor.

MSBT’s debut versus other spot Bitcoin ETFs

Compared with other spot Bitcoin ETFs launched earlier, MSBT’s first-day inflows were lower. Multiple spot Bitcoin ETFs began trading on January 11, 2024, including Bitwise’s BITB, which recorded $237.9 million in inflows, followed by Fidelity’s FBTC with $227.0 million in inflows. BlackRock’s IBIT recorded $111.7 million in inflows.

Invesco’s BTCO, Valkyrie’s BRRR, Wisdom Tree’s BTCW, and VanEck’s HOLD were among the funds that recorded inflows less than MSBT.

Fees and scale as a potential advantage

Despite launching later, MSBT’s fee structure is positioned as a competitive advantage. The article cites an expense ratio of 14 basis points for MSBT, compared with Grayscale’s BTC at 1 basis point and BlackRock’s IBIT at 11 basis points, describing MSBT as the cheapest fund in the comparison presented.

Management commentary

In a recent Bloomberg interview, Allyson Wallace, global head of ETFs at Morgan Stanley Investment Management, said: “The demand, especially from the high-net-worth investors, has been quite high. Viewed at the firm level, this is an asset class that is not going away.”

Broader institutional shift

The article frames the launch as part of a wider shift in sentiment toward crypto among traditional institutional players. It quotes Strategy’s new CEO, Phhong Lee: “In the last month, Morgan Stanley, Charles Schwab, and Citadel — among the world’s largest wealth managers, broker-dealers, and hedge funds — have announced plans to build Bitcoin capabilities. Probably nothing.”

Volatile market backdrop

The ETF launch comes as the crypto market experienced sharp swings. The article says the market surged after an announcement of an immediate ceasefire in the ongoing U.S.-Iran tension, with crypto rising more than 4% on April 8.

At the time of reporting, the crypto market had fallen back to sellers and was trading at $2.42 trillion. Bitcoin was still above $70,000, changing hands at $71,501.17.

Bottom line

Morgan Stanley’s MSBT debuted with comparatively modest inflows, but the article highlights fees and scale as potential advantages versus other spot Bitcoin ETFs. It also notes that the launch occurred during a volatile period for crypto, reflecting banks’ stated long-term conviction in Bitcoin.