Morgan Stanley’s spot bitcoin ETF, MSBT, began trading Tuesday with an expense ratio of 0.14%, under BlackRock’s iShares Bitcoin Trust (IBIT) at 0.25%. The fund tracks the CoinDesk Bitcoin Benchmark 4 PM NY Settlement Rate and enters the market as a direct challenger to the largest and most active spot bitcoin ETF products.
Spot bitcoin ETFs all hold bitcoin and follow its price, so the real areas of competition are cost, liquidity, and access. IBIT has led since launch on both scale and trading activity, with roughly $55 billion in assets under management. It has also become the most liquid vehicle for trading both ETF shares and options tied to bitcoin ETFs. That advantage is substantial, and it is not something a newcomer can quickly match.
Lower fees and advisor distribution reshape the contest
Bloomberg Intelligence ETF analyst James Seyffart said the launch will matter, but whether MSBT can actually pull assets away from other funds remains unclear. In his view, IBIT’s lead in ETF trading and the options market is unlikely to be challenged by MSBT anytime soon.
Still, Morgan Stanley brings a different kind of strength. Nate Geraci, president of NovaDius Wealth Management, said distribution is critical in the ETF business, and Morgan Stanley has a major advantage through its large wealth management network. Advisors can shift client allocations with a single trade, which means fresh demand may be directed into MSBT instead of existing funds.
Geraci also noted that MSBT undercuts IBIT by 11 basis points, a difference large enough to draw attention from investors and from BlackRock itself. The shift reflects a broader change in the spot bitcoin ETF market: early inflows favored large, trusted issuers with deep liquidity, while fee sensitivity has become more important as more established names enter the field.