Morgan Stanley has become the first major U.S. commercial bank to offer a spot Bitcoin ETF, with its product, MSBT, drawing $30.6 million in inflows on its opening trading day, according to data from Farside Investors. The debut arrives as competition in the Bitcoin ETF space intensifies among major financial institutions. Despite the strong start for MSBT, Wednesday overall saw net outflows of $124.5 million across spot Bitcoin ETFs, marking a second consecutive day of sector-wide withdrawals.
The broader category nonetheless remains positive for the week, buoyed by a $471 million single-day inflow recorded on Monday — the largest such figure since February. That performance has helped offset the recent outflows and kept the funds in positive territory on a weekly basis. The fluctuating flows reflect ongoing investor uncertainty even as institutional interest in Bitcoin products continues to grow.
One of MSBT’s most notable features is its expense ratio of 0.14%, making it the least expensive spot Bitcoin ETF currently available. This undercuts the category’s dominant player, BlackRock‘s IBIT, by 11 basis points. IBIT currently charges 0.25% annually and holds approximately $56 billion in assets under management, giving it a commanding lead in the space.
Bloomberg Intelligence analyst James Seyffart suggested the low fee structure may be a deliberate strategy rather than a straightforward profit play. He described MSBT as potentially “a loss leader,” arguing that Morgan Stanley may be using the product as a way to attract wealthy crypto investors into its broader wealth management platform. His colleague Eric Balchunas called the launch “arguably biggest btc launch since they began” and projected that MSBT could accumulate $5 billion in assets within its first year.
Balchunas had previously told Decrypt that Morgan Stanley’s offering is “not going to knock off BlackRock and become the biggest, but I believe it will do well.” He pointed to the firm’s internal distribution network as a key advantage, noting that “what Morgan Stanley has going for it is a captive audience” in the form of its own team of financial advisors. That built-in client base could provide a steady source of inflows that other newer entrants to the market may lack.
Bitcoin is currently trading at $71,260, reflecting a 0.6% decline on the day but a 6.6% gain over the past week, according to CoinGecko data. On prediction market Myriad, owned by Decrypt’s parent company Dastan, users are evenly divided on the cryptocurrency’s next major move, assigning equal probability to a rise toward $84,000 or a drop to $55,000. The split sentiment underscores the uncertainty surrounding Bitcoin’s near-term direction even as institutional products tied to it continue to expand.
Originally reported by Decrypt.
