Morgan Stanley Sparks Fee War With Ultra-Low Bitcoin ETF Proposal

Morgan Stanley has moved to price its planned spot Bitcoin ETF below every rival in the US, filing an amended S-1 with the Securities and Exchange Commission that sets the annual fee at 0.14%. 

If approved, the Morgan Stanley Bitcoin Trust would trade on the NYSE under ticker MSBT and become the lowest-cost fund in a US spot Bitcoin ETF market that now holds about US$83 billion (AU$120 billion) in assets.

The filing, first submitted in January 2026 and amended on March 27 and 28, places Morgan Stanley one basis point below the current low-fee leader, Grayscale Bitcoin Mini Trust, at 0.15%. 

It also undercuts BlackRock’s IBIT and Fidelity’s FBTC, both at 0.25%, and is far below Grayscale’s older GBTC product, which charges 1.50%. Bloomberg ETF analysts have pointed to a possible early April launch if the SEC grants approval.

The fee cut has been seen as significant because spot Bitcoin ETFs largely compete on cost, issuer strength and distribution. 

Bloomberg senior ETF analyst Eric Balchunas described the pricing as a “semi-shock,” while analyst James Seyffart called it a major move. The filing has added to expectations of a new round of fee pressure across the sector.

Read more: Mastercard Bets Big on Stablecoins to Bridge Crypto and Traditional Payments

The Bank’s (Massive) Advantage

Morgan Stanley would be the first major US bank to launch its own spot Bitcoin ETF, giving it an institutional advantage that other issuers do not have. 

Coinbase is named as prime broker and Bitcoin custodian, while BNY Mellon would handle cash management and administrative functions, matching the kind of service structure already used by existing spot Bitcoin ETF providers.

Well, in all fairness, the bank’s distribution reach could be even more important than the fee. Morgan Stanley’s roughly 16,000 financial advisors oversee around US$8 trillion (AU$11.6 trillion) in client assets. 

A 2% allocation across that base would equal about US$160 billion (AU$232 billion) directed into Bitcoin, nearly three times the current scale of BlackRock’s IBIT. 

At 0.14%, the firm would also remove a key objection for advisors recommending an in-house product, since no cheaper US spot Bitcoin ETF currently exists. That is likely to increase pressure on BlackRock and Fidelity to lower their own fees before, or soon after, MSBT reaches the market.

Related: Ripple Tests Stablecoin Trade Finance in Monetary Authority of Singapore Sandbox

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