What to know:
- Morgan Stanley has launched the MSBT spot bitcoin ETF with a 0.14% fee, undercutting BlackRock’s dominant IBIT fund, which charges 0.25%.
- While IBIT remains the most liquid bitcoin ETF with about $55 billion in assets and leading trading and options volume, Morgan Stanley’s vast wealth management network could steer new flows toward MSBT.
- The new fund accelerates a shift in the market toward fee competition and distribution power, posing the first sustained challenge to IBIT’s grip on investor inflows.
BlackRock’s most popular exchange-traded fund is now facing strong competition. Morgan Stanley has launched a similar, lower-cost fund and can offer it to its vast network of clients with trillions of dollars in assets.
As an analyst, I’ve been watching the launch of the Morgan Stanley Bitcoin ETF, ticker MSBT. It started trading today with a 0.14% expense ratio, which is slightly lower than the 0.25% charged by the iShares Bitcoin Trust (IBIT). While the difference isn’t huge, in the current Bitcoin ETF landscape, even small price advantages can be really important for attracting investors.
Spot bitcoin ETFs all hold actual bitcoin and follow its price. This means the main differences between them come down to cost, how easily you can buy and sell shares (liquidity), and accessibility. Since its launch, IBIT has become the largest and most actively traded ETF of its kind, with around $55 billion in assets, and offers the best liquidity for both shares and options.
That liquidity gives IBIT an edge that may be hard to replicate.
James Seyffart, an ETF analyst at Bloomberg Intelligence, noted that while the launch will have an effect, it remains to be seen whether it will attract investments away from existing funds. He added that the iShares Bitcoin Trust (IBIT) is currently the most actively traded Bitcoin ETF, both for direct purchases and options trading, and it’s unlikely the Grayscale Bitcoin Trust (MSBT) will be able to match that level of activity in the foreseeable future.
Still, Morgan Stanley’s entry changes the competitive balance.
The bank can utilize its extensive network of financial advisors, allowing them to easily move client investments with just one transaction. This could mean that new investment money will flow into MSBT instead of going to existing funds such as IBIT.
According to Nate Geraci, president of the ETF Store, Morgan Stanley’s extensive network of financial advisors gives them a significant advantage in getting ETFs into investors’ hands. Paired with the fact that their spot bitcoin ETF, MSBT, has the lowest fees available, Geraci believes this creates a powerful combination for growth.
Geraci also noted that MSBT’s fees are slightly lower than IBIT’s – by 11 basis points – a difference that’s noticeable to investors and has even caught the attention of BlackRock.
IBIT’s success mirrors changes in the market. Initially, investors flocked to well-established companies with plenty of available shares. However, as more reputable firms launched similar products, investors began focusing more on lower fees.
Morgan Stanley’s launch may speed up that shift, even if IBIT retains its lead in trading volume.
My research shows the market is becoming increasingly segmented. Specifically, IBIT seems to be attracting and supporting active traders with its strong depth and liquidity.
Companies like MSBT are trying to gain market share by offering lower prices and wider availability. Morgan Stanley, with its vast wealth management division and large network of financial advisors, has a significant edge. With more investors now using financial advisors instead of trading on their own, this approach is becoming increasingly important.
Currently, IBIT is the leading product in its category. However, as fees decrease and more competitors emerge, IBIT’s dominance in attracting investment may be challenged for the first time.
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2026-04-08 15:58