Morgan Stanley became the first major U.S. commercial bank to launch a spot Bitcoin ETF on Wednesday, and its new MSBT fund pulled in $30.6 million on day one, according to Farside Investors. The debut adds a fresh challenger to a market dominated by BlackRock’s IBIT, and it immediately sharpened fee competition: MSBT’s 0.14% expense ratio is the cheapest in the cohort, 11 basis points below IBIT’s 0.25%.
How the market reacted
- Despite MSBT’s inflows, Wednesday was the second consecutive day of net outflows from spot Bitcoin ETFs, with the group losing $124.5 million that day.
- The category remains positive for the week, however, buoyed by Monday’s $471 million inflow—their largest single-day haul since February.
- BlackRock’s IBIT, which still leads the category with roughly $56 billion in assets, attracted $40.4 million on Wednesday.
What analysts are saying
- Bloomberg Intelligence’s James Seyffart suggested MSBT “might be a loss leader,” arguing Morgan Stanley could be using the low fee to win wealthy crypto clients and steer them into its broader wealth-management offerings.
- Fellow Bloomberg analyst Eric Balchunas called the debut “arguably [the] biggest BTC launch since they began” and projected about $5 billion in assets for MSBT in its first year. Balchunas told Decrypt he doesn’t expect Morgan Stanley to unseat BlackRock as the largest provider, but noted the bank’s advantage: “a captive audience” of advisors and clients.
Market snapshot
- Bitcoin is trading around $71,260, down 0.6% on the day but up 6.6% on the week (CoinGecko).
- On prediction market Myriad, owned by Decrypt’s parent company Dastan, users are evenly split on Bitcoin’s next major move—placing equal odds on a rally to $84,000 or a drop to $55,000.
Why it matters
Morgan Stanley’s entry raises the stakes in the spot-Bitcoin ETF race by combining an ultra-low fee with the bank’s distribution network. Whether MSBT wins significant share will depend on how many high-net-worth clients and advisors it can convert—and whether low fees translate into long-term inflows in a competitive and sometimes fickle market.
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