Morgan Stanley’s Bitcoin Trust (MSBT) has taken a significant step forward as the New York Stock Exchange (NYSE) confirmed an official listing notice for the long-awaited spot Bitcoin exchange-traded fund. This development is perceived as a potential precursor to an imminent launch, according to Bloomberg Senior ETF Analyst Eric Balchunas. If regulators approve the fund, MSBT will be notable as the first spot Bitcoin ETF directly issued by a major U.S. bank, distinguishing it from existing products launched by asset management firms like BlackRock and Fidelity.
Morgan Stanley’s wealth management division manages a vast network of approximately 16,000 financial advisors and trillions in client assets, which could provide an extensive distribution platform for exposure to Bitcoin in traditional investment portfolios. While the specific fee structure for the MSBT has yet to be disclosed, comparable existing spot Bitcoin ETFs charge management fees ranging from 0.20% to 0.30% annually, with BlackRock’s iShares Bitcoin Trust (IBIT) charging about 0.25%.
In a recent filing with the U.S. Securities and Exchange Commission (SEC), Morgan Stanley confirmed that the fund will operate under the ticker MSBT on NYSE Arca. The Morgan Stanley Bitcoin Trust is designed to be a passive investment vehicle that tracks the spot price of Bitcoin through direct holdings. Investors will be able to purchase shares that reflect the value of Bitcoin held in custody, thus gaining exposure to the cryptocurrency without actually owning it directly.
During her address at the Digital Asset Summit, Amy Oldenburg, Head of Digital Asset Strategy at Morgan Stanley, emphasized that the banking sector’s foray into digital assets is part of a long-standing initiative to modernize financial infrastructures. She dismissed the notion that banks are merely responding out of fear of missing out on market trends.
The trust plans to initiate its fund with 50,000 shares, aiming to raise approximately $1 million in initial proceeds. The Coinbase Custody Trust Company will serve as the primary custodian for Bitcoin assets, ensuring that most holdings are stored in cold storage and managing transfers related to share creation and redemption. BNY Mellon has been designated to handle administrative duties, such as maintaining shareholder records, overseeing cash custody, and managing accounting for the trust.
The structure of the MSBT follows established models used by other spot Bitcoin ETFs. It includes a mechanism for a portion of holdings to be moved into trading wallets during the processes of share creation and redemption. This involves authorized participants trading cash for Bitcoin or redeeming shares for the underlying asset. Although the filing highlights that custody insurance will be in place, it notes that this insurance is shared across multiple clients and may not cover all losses, a typical disclosure for spot Bitcoin ETFs.
