Morgan Stanley to Challenge Blackrock Bitcoin ETF (IBIT) With Just 14 Bps Fees

Key Insights:

• Morgan Stanley pushes low-fee Bitcoin ETF launch, undercutting competitors like BlackRock and Grayscale.
• U.S. spot Bitcoin ETFs recorded $225 million in outflows, with iShares Bitcoin Trust (IBIT) seeing $201.67 million exit.
• Analyst James Seyffart expects Morgan Stanley’s ETF launch soon and noted filings for Ethereum and Solana ETFs.

Despite spot Bitcoin ETFs facing major outflows recently, institutional interest in the product remains high. Morgan Stanley is now willing to start offering these ETFs while challenging the likes of BlackRock’s IBIT. This shows that big banks are still bullish over BTC ETFs and their future ahead.

Morgan Stanley Bitcoin ETF to Come With 14 Bps Fees

Morgan Stanley has amended its S-1 filing to propose a spot Bitcoin ETFs under the ticker MSBT, introducing a 14 basis point fee. This fee is lower than competing products from Grayscale at 0.15% and BlackRock at 25 basis points.

If approved, the fund would become the first spot Bitcoin ETF issued directly by a major U.S. bank. Besides, it will also mark a major milestone for institutional crypto adoption.

Analyst MartyParty noted that the proposed low-fee structure, combined with a planned NYSE Arca listing, could intensify fee competition across Bitcoin ETFs. It will also attract adviser-driven inflows through Morgan Stanley’s wealth-management distribution network. Currently, the bank manages $6 trillion in assets with 16k advisors on-board.

Popular ETF market expert Nate Geraci said that this fee on the Bitcoin ETF would be meaningfully lower than its gold ETF. He wrote:

Getting A Slice of the Bitcoin ETF Market

The US Bitcoin ETF market has been on shaky ground recently, facing major outflows. This comes amid the Bitcoin price crash to $66,000 just ahead of Friday’s closing. Rising geopolitical tensions and the stress in the US bond markets are pushing risk assets lower.

As a result of this, the US Bitcoin ETFs have been bleeding heavily. On Friday, March 27, these ETFs saw net outflows of $225 million. BlackRock’s IBIT saw the most outflows at over $200 million. This could be due to a major selloff as well as the rising competition from Morgan Stanley.

During yesterday’s trading session, BlackRock’s iShares Bitcoin Trust (IBIT) recorded net outflows of 3,061 Bitcoin, valued at approximately $201.67 million.

Despite the outflows, the fund registered $2.5 billion in trading volume. This shows a strong investor activity currently in the market. Market participants noted that while outflows reflect short-term positioning shifts, elevated trading volumes suggest sustained institutional engagement with spot Bitcoin ETFs.

Morgan Stanley Can MAke Greater Inroads Ahead

Bloomberg ETF strategist James Seyffart said that he expects the Morgan Stanley Bitcoin ETF (MSBT) to come in April next month. He noted that the lowest standard fee for a U.S. spot Bitcoin ETF currently stands at 0.15%, highlighting growing fee competition in the market.

Seyffart added that Morgan Stanley has also filed for spot Solana and Ethereum ETFs. As per him, the bank could introduce similarly low-cost products, potentially undercutting existing offerings.

However, Seyffart pointed out that VanEck’s VanEck Bitcoin Trust (HODL) is currently the cheapest product in the market. This is due to a 0.00% fee due to a temporary fee waiver, effectively setting the lowest cost benchmark for investors.

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