For two years, BlackRock's iShares Bitcoin Trust has been the dominant player in the spot Bitcoin ETF market. IBIT holds over $55 billion in assets, leads the market in trading volume, and has the deepest options market of any crypto ETF in the US. When institutional investors wanted Bitcoin exposure through a regulated wrapper, there was essentially one serious answer.
That changed last week.
Morgan Stanley launched the Morgan Stanley Bitcoin Trust, trading under the ticker MSBT on NYSE Arca, with an expense ratio of 0.14%. That is 11 basis points below IBIT's 0.25% fee and the lowest expense ratio of any spot Bitcoin ETF currently available to US investors. The fund pulled in $34 million in day-one inflows, the strongest debut for any Morgan Stanley ETF, and attracted $14.9 million on day two, placing it in the top 1% of all ETF launches over the past year by second-day flow performance.
The fee differential matters less for the price than for the signal. Morgan Stanley manages trillions in client assets through its wealth management division, and its financial advisors now have direct incentive to recommend MSBT over IBIT when building client portfolios that include Bitcoin exposure. That distribution advantage is not replicable overnight by a firm without Morgan Stanley's advisor network.
The broader crypto ETF market is expanding rapidly. Cumulative assets across all US Bitcoin ETFs surpassed $90 billion in March. XRP ETFs collectively approached $1 billion in assets under management following the SEC and CFTC's landmark March crypto commodity classification that we covered in depth. Bitwise has filed an updated S-1 for a Hyperliquid ETF. The fee war in crypto ETFs has started. BlackRock is paying attention.
