Morgan Stanley has filed to launch the cheapest U.S. spot Bitcoin ETF, proposing a 0.14% management fee for its MSBT product. This undercuts the current lowest fee of 0.15% and is 44% lower than BlackRock‘s market-leading iShares Bitcoin Trust. Analysts suggest the bank’s massive financial advisor network could drive significant inflows, potentially reshaping the competitive landscape as the product may debut in April.
U.S. spot Bitcoin ETFs are poised for intensified competition in April. Morgan Stanley aims to undercut rivals by proposing a 0.14% management fee for its MSBT product, as stated in a refiled S-1 form. This fee is cheaper than Grayscale Mini‘s 0.15% and 44% lower than BlackRock‘s 0.25% charge for its iShares Bitcoin Trust.
Bloomberg ETF analyst Eric Balchunas noted the product, which could debut in two weeks, will have a “shot at getting outside assets.” This (Morgan Stanley) will be the first bank to put out a Spot BTC ETF, and this bank happens to have 16k advisors managing $6T in assets, he added. This positions it as a potential game-changer for attracting flows.
Strategy CEO Phong Le projected Morgan Stanley could see “monster” flows and outpace BlackRock‘s IBIT. The bank is a major distribution channel for IBIT, and its lower fee could create a disadvantage for the current leader. At the time of writing, IBIT held a dominant $52 billion in net assets, nearly five times Fidelity‘s FBTC.
On March 27, the ETF market saw $225 million in net outflows, with BlackRock leading redemptions at $201 million. This contributed to Bitcoin’s price dropping to around $65,000. However, the 90-day average net flow showed selling pressure had dropped 92% from January to late March, according to Glassnode data.
Bitcoin has been range-bound between $60,000 and $75,000 during this period. A potential reversal from net outflows to net inflows in the second quarter could influence the cryptocurrency’s price trajectory. The entry of a major, low-fee bank product marks a significant shift in the spot Bitcoin ETF arena.
