Morgan Stanley Proposes Market's Lowest Bitcoin ETF Fee at 0.14%
Wall Street giant Morgan Stanley plans to charge just 0.14% for its upcoming spot Bitcoin ETF, undercutting all current US competitors and potentially triggering a price war among providers.
Wall Street powerhouse Morgan Stanley plans to introduce its spot Bitcoin exchange-traded fund with a 0.14% management fee, positioning it as the most affordable option in the United States and likely pressuring competitors to reduce their pricing structures to maintain market share.
According to Morgan Stanley's most recent S-1 registration filing submitted on Friday, the proposed 0.14% management fee would undercut the Grayscale Bitcoin Mini Trust ETF (BTC) by one basis point, which currently holds the title of most affordable offering in the United States, and would come in 11 basis points lower than BlackRock's iShares Bitcoin Trust ETF (IBIT).
"Big move here. They are not messing around," remarked James Seyffart, an ETF analyst at Bloomberg, who forecasted that the Morgan Stanley Bitcoin Trust (MSBT) is "likely to launch in early April."
Eric Balchunas, another Bloomberg ETF analyst, noted that the competitive fee structure ensures that Morgan Stanley's approximately 16,000 financial advisors — who collectively oversee $6.2 trillion in client assets — wouldn't face any conflicts of interest when proposing the product to their clientele.
Since spot Bitcoin ETFs are designed to mirror the price performance of Bitcoin (BTC), Morgan Stanley's aggressively low fee structure could trigger a renewed price war within the $83 billion marketplace, creating instant competitive pressure on other issuers to lower their costs or face the prospect of losing market share.
Should regulators grant approval, Morgan Stanley would become the first traditional bank to offer a spot Bitcoin ETF, thereby providing Bitcoin investment opportunities to millions of its wealthy client base.
"They are the ultimate gatekeepers of rich boomer money," Balchunas commented.
Morgan Stanley has already designated Coinbase and Bank of New York Mellon as the proposed custodial partners for its Bitcoin ETF product.
Morgan Stanley seeking suite of crypto ETFs, banking charter
Morgan Stanley, which had historically maintained a cautious stance toward cryptocurrency, submitted its application for the spot Bitcoin ETF during the first week of January, simultaneously filing for a Solana (SOL) ETF.
The financial institution subsequently submitted documentation for a staked Ether (ETH) ETF later during that same week, and before January concluded, the bank designated Amy Oldenburg, one of Morgan Stanley's most tenured executives, to spearhead its digital asset division.
Additionally, Morgan Stanley submitted an application for a national trust banking charter on Feb. 18, with the objective of obtaining authorization to custody specific digital assets and facilitate purchases, sales and swap transactions for its clients, in addition to providing staking services.
Prior to the investment bank's adoption of its comprehensive institutional cryptocurrency strategy in October, the firm had advised investors to allocate between 2% to 4% of their portfolios to crypto holdings. The bank had also previously authorized its financial advisors to suggest crypto funds to clients holding individual retirement accounts (IRAs) and 401(k) retirement plans.