Morgan Stanley Bitcoin ETF gets off to a strong start with $33m debut

Morgan Stanley’s Bitcoin exchange-traded fund — the first from a Wall Street bank — had a roaring debut Wednesday.

Trading on the NYSE Arca under the ticker MSBT, the latest US Bitcoin ETF to hit the market took in over $33 million in fresh cash.

“The massive inflows the fund received on its opening day — safe to say, entirely by clients of Morgan Stanley — prove that there’s massive demand among wirehouse clients and equally tremendous support among its 16,000 advisors,” Ric Edelman, founder of Edelman Financial Engines, told DL News. 

The Morgan Stanley Bitcoin Trust debut comes as traditional finance firms are doing more to offer crypto-related services and products to their clients.

Bitcoin’s price is currently more than 40% below its all-time high of $126,080 per coin, and was trading hands for $71,349, according to CoinGecko.

Strong start

The ETF debut puts MSBT in the top 1% of launches in terms of inflows, Eric Balchunas, senior ETF analyst at Bloomberg Intelligence, told DL News. 

He added that the fund got off to a strong start but most of the trading action happened before 1pm.

Morgan Stanley told DL News that the MSBT traded more than 1.6 million shares and total assets stood at over $33.8 million as of Wednesday.

The top investment bank has 16,000 financial advisors, meaning there is a big chance they can get new clients to invest in the leading cryptocurrency through the ETF.

“With MSBT, we’re extending our product offering to meet growing client interest in digital assets,” Ally Wallace, global head of ETF strategy at Morgan Stanley Investment Management, said in a statement.

Price war?

MSBT is the cheapest out of the American products, with a 0.14% expense ratio.

That’s cheaper than the biggest Bitcoin ETF, BlackRock’s iShares Bitcoin Trust, which charges a 0.25% fee, and cheaper than Grayscale’s Bitcoin Mini Trust ETF, which offers clients a 0.15% fee.

The low fee means that other asset managers may decide to lower their fees, Edelman said. When the 10 Bitcoin funds debuted in January 2024, issuers slashed fees just before their launches, and several funds offered temporary waivers or very low expense ratios to win early assets.

“We may experience another price war, like the one we saw when the first Bitcoin ETFs launched in Jan 2024.” added Edelman.

“That’s great news for investors — and for Bitcoin.”

Mathew Di Salvo is a news correspondent with DL News. Got a tip? Email at mdisalvo@dlnews.com.