Why Morgan Stanley Launched the Cheapest Bitcoin ETF on the Market

Key Takeaways

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  Morgan Stanley has shocked the market by launching MSBT, the cheapest spot Bitcoin ETF available at just 14 basis points, undercutting BlackRock’s iBIT by 11 bps.

  “It performed really well... traded over 34 million on day one, which is top percentile of ETF launches over the last year or two.”

• •

  The launch signals a major shift to a 'Bring Your Own Assets' strategy, as Morgan Stanley looks to migrate its $7 trillion in wealth management assets into its own proprietary crypto product.

  “Morgan Stanley isn't known to be the vanguard of anything... they are basically offering this at cost to them. There's probably no money being made at 14 bips on this.”

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  While BlackRock retains a massive lead in liquidity and options volume, MSBT is designed to win the 'slow burn' competition for long-term, fee-sensitive advisor portfolios.

  “Morgan Stanley’s wealth platform basically has over 7 trillion in assets... they are officially now recommending a 2 to 4% allocation.”

• •

  With major wirehouses like Morgan Stanley and Schwab now recommending 2–4% allocations, the institutional consensus has flipped: inaction on crypto is now viewed as a risky active choice rather than a safe default.

  “One thing that no one is touching iBIT on is the volume and the options volume... this is going to be geared much more towards the advisor base.”

• •

  MicroStrategy's potential S&P 500 inclusion is increasingly becoming a pure Bitcoin price story, further blurring the lines between traditional equity markets and digital assets.

  “Inaction on crypto is the active choice, not the safe one, for portfolio managers.”

Episode Description

James Seyffart didn't expect Morgan Stanley to do this. Now he's watching to see if BlackRock blinks. Nexo is the premier digital wealth platform. Receive interest on your crypto, borrow against it without selling, and trade a range of assets. Now available in the U.S with 30 days of exclusive privileges.  Get started at http://nexo.com/unchained Ether.fi is giving Unchained listeners 15% cashback on food and ride apps — and that's on top of the 3% you get on everything else.  Your bank is charging you to use your own money. Laura switched and loves her card! Go to ether.fi/unchained to claim your offer.  Bitcoin’s application layer, Citrea, launched its mainnet, expanding Bitcoin’s utility to privacy, lending, BTC yields, and more. Citrea enables: cBTC: The first trust-minimized Bitcoin on a fully programmable platform. ctUSD: A native stablecoin for Bitcoin, allowing for unified liquidity. Bitcoin Capital Markets bringing demand, and utility to the Bitcoin Network. Explore the Citrea Ecosystem. ======================================================== When Morgan Stanley launched MSBT this week, it didn't just become the first major US bank to issue its own spot Bitcoin ETF — it became the cheapest one on the market, undercutting BlackRock's iBIT by 11 basis points. For a firm not known for fee competition, that surprised even close ETF watchers.  James Seyffart, senior analyst at Bloomberg Intelligence, has spent years tracking how wirehouses have slowly warmed to Bitcoin products. He joins Laura Shin to discuss what MSBT's launch says about where institutional crypto adoption is heading, whether Morgan Stanley's 16,000 advisors and $7 trillion in assets could meaningfully shift flows, and why Seyffart now sees inaction on crypto as the active choice, not the safe one, for portfolio managers.  Plus: Strategy's $14.5 billion loss, Saylor keeps buying, and why MSTR’s S&P 500 question is now entirely a Bitcoin price story. Host: ⁠Laura Shin⁠, Host / Unchained Guest: ⁠⁠⁠⁠⁠⁠⁠⁠⁠James Seyffart, Senior Analyst, Bloomberg Intelligence Learn more about your ad choices. Visit megaphone.fm/adchoices