Morgan Stanley, one of the leading investment banks in the US, has taken its moves towards the crypto asset market a step further. The company has submitted a second updated S-1 registration form to the US Securities and Exchange Commission (SEC) as part of its spot Bitcoin ETF application. This development once again demonstrates the increasing institutionalization of Wall Street's interest in digital assets.
Morgan Stanley Makes Progress in Bitcoin ETF Process
According to the latest application, the fund, to be created under the name "Morgan Stanley Bitcoin Trust," is planned to be traded on the NYSE Arca exchange under the code "MSBT" if approved. More details about the fund's structure were also shared in the updated file. Accordingly, the ETF's creation unit will consist of 10,000 shares, and it will initially enter the market with a "seed" basket of 50,000 shares. In this initial phase, it aims to reach a size of approximately $1 million.
Morgan Stanley also announced that, as part of transparency, it purchased two shares of the ETF for audit purposes on March 9th. These types of transactions indicate that the fund's operational readiness process is progressing.
The fund has significant business partners on the custody and operational side. Accordingly, BNY Mellon will be responsible for cash custody, management, and transfer transactions. Coinbase will act as the prime broker for Bitcoin assets and will hold the digital assets in cold wallets.
Approval is not certain, but institutional interest is increasing
This second update to the S-1 application shows that the process is progressing, but it does not mean final approval. However, if approved, Morgan Stanley could become the first major US bank to directly issue a spot Bitcoin ETF. This could indicate that the integration between traditional finance and the crypto market has entered a new phase.
On the other hand, it is known that the company also applied for a spot Solana ETF in January along with its Bitcoin ETF application. However, the lack of a new update on the Solana side indicates that the Bitcoin product is progressing faster.
Amy Oldenburg, Head of Digital Asset Strategy at Morgan Stanley, recently emphasized that the adoption process of crypto ETFs is still in its early stages. According to Oldenburg, approximately 80% of current demand comes from platforms where individual investors trade independently. This indicates that crypto assets still have a limited presence in portfolios managed by financial advisors.
Billions of dollars in the ETF market
Spot Bitcoin ETFs have attracted strong capital inflows since their approval in the US in 2024. Total inflows exceeding $56 billion reveal the adoption of these products by investors. In particular, BlackRock's IBIT and Fidelity's FBTC funds hold the largest share of the market.
While some outflows may be seen in the short term, the long-term picture indicates that institutional demand continues. Indeed, since ETFs require direct Bitcoin purchases, they can reduce the supply in the market, creating upward pressure on the price.
Considering that Morgan Stanley manages approximately $1.8 trillion in assets, the impact of a potential ETF approval could be even more remarkable. Even if the company allocated only 1% of its portfolios to Bitcoin, it would theoretically mean billions of dollars in new demand.
Regulatory clarity could accelerate the process
The recent move in the US to deem a significant portion of crypto assets as securities has removed one of the biggest obstacles for institutional investors. According to experts, this development could help banks and asset managers gain easier access to crypto products.
Morgan Stanley's progress on its ETF application is also seen as part of this transformation. The SEC's decision in the coming period will be decisive not only for this fund but also for the direction of institutional crypto investments in general.
