Investment bank Morgan Stanley is seeking to launch a spot Bitcoin exchange-traded fund with a proposed annual fee of 0.14%, which would make it the cheapest spot Bitcoin ETF in the U.S. market and could pressure rivals to cut fees to remain competitive.
The 0.14% fee was disclosed in Morgan Stanley’s latest S-1 registration filing. It is one basis point lower than the Grayscale Bitcoin Mini Trust ETF (currently the market’s lowest-fee option) and 11 basis points below BlackRock’s iShares Bitcoin Trust (IBIT).
Bloomberg ETF analyst James Seyffart called the move “big” and predicted the Morgan Stanley Bitcoin Trust (MSBT) could launch in early April. Fellow Bloomberg analyst Eric Balchunas noted the low fee would help remove any perceived conflict for Morgan Stanley’s roughly 16,000 financial advisors—who oversee about $6.2 trillion in client assets—when recommending the product to clients.
Because spot Bitcoin ETFs aim to track Bitcoin (BTC) price movements directly, Morgan Stanley’s ultra-low fee could ignite a fresh fee war in the roughly $83 billion spot Bitcoin ETF market, placing immediate pressure on competitors to lower costs or risk losing assets.
If approved by regulators, Morgan Stanley would be the first bank to issue a spot Bitcoin ETF, broadening access to Bitcoin exposure for many of its high-net-worth and institutional clients. The bank has named Coinbase and Bank of New York Mellon as proposed custodians for the fund.
Morgan Stanley has signaled a broader push into crypto products. In early January it filed for both a spot Bitcoin ETF and a Solana (SOL) ETF, followed by a filing for a staked Ether (ETH) ETF later that week. The firm also appointed longtime executive Amy Oldenburg to lead its digital asset team.
On Feb. 18, Morgan Stanley applied for a national trust banking charter intended to allow custody of certain digital assets and to execute purchases, sales, swaps and staking services on behalf of clients.
Before ramping up its institutional crypto strategy, Morgan Stanley had in October recommended a conservative 2% to 4% allocation to crypto for investors and began allowing its financial advisors to recommend crypto funds to clients’ IRAs and 401(k)s.
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