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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.”
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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.”
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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.”
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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.”