Morgan Stanley has launched the first spot Bitcoin ETF from a major U.S. commercial bank. The Morgan Stanley Bitcoin Trust (MSBT) attracted $30.6 million in inflows on its Wednesday debut while offering the lowest expense ratio in the category at 0.14%. Despite this new entrant, the broader spot Bitcoin ETF market saw net outflows for a second consecutive day, losing $124.5 million.
Morgan Stanley made history by becoming the first major U.S. commercial bank to launch a spot Bitcoin ETF. Its MSBT product recorded inflows of $30.6 million on its first trading day, according to data from Farside Investors.
The broader spot Bitcoin ETF market, however, experienced net outflows of $124.5 million on Wednesday. This marked a second straight day of withdrawals, though the segment remains net positive for the week following a $471 million haul on Monday.
MSBT’s 0.14% expense ratio undercuts all competitors, making it the cheapest Bitcoin ETF available. This launch intensifies competition with category leader BlackRock, whose IBIT fund holds $56 billion in assets and charges 0.25%.
Bloomberg Intelligence analyst James Seyffart suggested the product “might be a loss leader.” He argued that “this is their way of, potentially trying to get some crypto millionaires—a lot of people with a lot of money—to join their wealth management product.”
In a separate tweet, Seyffart’s colleague Eric Balchunas called MSBT’s debut “arguably biggest btc launch since they began.” Balchunas projected the fund could reach $5 billion in assets under management in its first year.
Balchunas noted that Morgan Stanley “is not going to knock off BlackRock and become the biggest, but I believe it will do well.” He added that “What Morgan Stanley has going for it is a captive audience. It’s got its own army of advisors.”
Bitcoin traded at $71,260 at the time of reporting, down 0.6% for the day. The cryptocurrency’s price was up 6.6% over the previous week, according to CoinGecko data.
