Morgan Stanley's MSBT ETF Buys 444 Bitcoin on First Day, Lands in Top 1% of ETF Launches

Morgan Stanley's new bitcoin ETF drew more than $30 million in inflows during its first day of trading. Per Morgan Stanley's official data, the ETF purchased 444.4 BTC, valued at approximately $31.7 million. Data for the ETF's second day of performance wasn't immediately available at press time.

Still, it was a notable outing for the newest player in the spot bitcoin ETF market, which is currently dominated by BlackRock's IBIT instrument. Morgan Stanley's product is perhaps now the most high-profile competitor to IBIT, though it remains to be seen whether BlackRock's position atop the market will be challenged.

MSBT holdings are a far cry from IBIT, which holds 783,744 BTC, according to BitcoinTreasuries.NET. Those holdings are valued at roughly $56.61 billion.

Analysts noted MSBT's strong performance during yesterday's trading session. Bloomberg analyst Eric Balchunas said the inflows exceeded his estimate of $30 million, saying it was  among the "top 1% of ETF launches."

Balchunas also predicted that MSBT will reach $5 billion in BTC holdings in its first year of trading.

Further, Balchunas suggested this morning that Morgan Stanley's entrance — and specifically its 0.14% annual fee, which makes it the cheapest spot bitcoin ETF on the market — could spur fee changes for other bitcoin ETFs. Still, he said he doesn't expect BlackRock to follow that path, given its dominant market position.

"When you are King of the Hill w tons of liquidity you have pricing power. Only way that changes is if someone else starts to out-flow them or if Vanguard were to file for one at like 10bps- altho that's a .01% chance rn," Balchunas wrote on X. 

Morgan Stanley's arrival as a bitcoin ETF issuer represents the end of a years-long process for the financial giant.

In 2021, the bank became the first major U.S. financial institution to offer wealthy clients access to bitcoin funds, doing so through partnerships with Galaxy Digital and NYDIG. Then-CEO James Gorman publicly acknowledged that bitcoin was "not going away" and "not a fad."

Following the SEC's approval of spot bitcoin ETFs in early 2024, Morgan Stanley moved to give some of its clients access to products like IBIT as well as Fidelity's spot bitcoin ETFs. It later expanded access to these products last fall. 

“MSBT reflects our firmwide approach to thoughtfully building digital asset capabilities grounded in traditional governance and market infrastructure that seeks to meet long-term client needs," Amy Oldenburg, Morgan Stanley's head of digital asset strategy, said in a statement. "We believe that our ability to simplify how investors access their complete portfolio across asset classes and investment types will resonate with our clients and investors across the globe.”