Morgan Stanley's spot Bitcoin ETF, MSBT, has attracted a net investment of $103 million in six trading days since it opened on April 8. This marks the highest inflow in the bank's history for an ETF in terms of first-week performance. Digital assets head Amy Oldenburg confirmed this to Bloomberg.
The figure makes more sense when put into perspective: MSBT has surpassed the inflow rate of WisdomTree's Bitcoin fund in its first week. It's also the cheapest of the current spot Bitcoin ETFs, with an annual fee rate of 0.14%, including BlackRock's IBIT.
Background: A decade of waiting
The SEC rejected the first Bitcoin ETF application in 2013. Over the next decade, dozens of applications have been submitted, all suffering the same fate. The reasoning has always been the same: the risk of market manipulation and the lack of adequate oversight mechanisms. In 2021, the door was opened to Bitcoin futures-based ETFs, but approval for a product directly linked to the spot market did not come until BlackRock applied in June 2023.
BlackRock's move was symbolic. The world's largest asset manager had taken the matter to the table, and the market took it seriously. Fidelity, Invesco, and ARK Invest lined up. The SEC approved several applications at once in January 2024. In the first few days, the money flowing into IBIT broke record after record. But the real issue is not the price, but the channel. Morgan Stanley's network of financial advisors managing trillions of dollars will now offer MSBT as a priority option for clients to access the crypto market indirectly. These advisors had been recommending BlackRock's fund since August 2024. The priority has changed hands.
It should also be noted that MSBT is still a small player. BlackRock's IBIT has reached $53 billion since its launch in January 2024. $103 million is a good start, but the gap between these two figures is long.
Goldman and BlackRock are next in line
Morgan Stanley's launch hasn't left competitors inactive. Goldman Sachs filed with the SEC last week for a Bitcoin Premium Income ETF. This structure, which aims to generate income through options strategies, aims to offer regular cash flow rather than spot price gains. BlackRock is also working on a similar income-focused product.
According to Nate Geraci, head of NovaDius Wealth Management, Goldman's move is a sign that established Wall Street institutions can no longer ignore Bitcoin. Geraci says it wouldn't be surprising if names like JPMorgan also take action soon.
We clearly see that spot ETF competition is leading to price compression. MSBT's 0.14% share is putting downward pressure on BlackRock and Fidelity. In the coming days, BlackRock's IBIT earnings data and the Federal Reserve's interest rate policy announcements will remain the two most important variables shaping the market's direction.
