Morgan Stanley Considers Pricing Its Bitcoin Project in Spot exchange-traded funds (ETFs) at 14 basis points, a level just below current low-cost options for similar products, according to an amended filing with the U.S. Securities and Exchange Commission (SEC). The move could spark a new wave of fee competition among existing funds.
The latest S-1 filing, filed Friday, shows the bank undercuts its competitors that charge closer to 15 to 25 basis points. The lowest fees on the market today are Grayscale’s Mini Trust Bitcoin ETF. which carries an expense ratio of 0.15%. Larger funds, including BlackRock’s iShares Bitcoin Trust (IBIT), have priced their products at 25 basis points.
On paper, the gap seems narrow. In practice, this may be enough to transfer money.
Spot Bitcoin ETFs offer almost identical exposure. Each fund holds bitcoin and aims to track its price. This leaves cost as one of the few variables that investors and advisors can influence. A financial advisor can move a client from one ETF to another in a single transaction, maintaining the same exposure while reducing annual fees.
This dynamic has already shaped the ETF market, and lower-cost products tend to attract inflows, while higher-fee funds can see assets drift over time. Grayscale’s flagship product, Bitcoin Trust (GBTC), holds approximately $10 billion in assets, up from $29 billion when it launched in January 2024.
Morgan Stanley’s scale adds another layer. Its wealth management arm oversees billions in client assets and has one of the largest advisor networks in the industry. Even small allocation changes within this base could move billions of dollars between funds.
The pricing decision also indicates a strategy. By entering with lower fees, Morgan Stanley could aim to quickly gain market share in a market where products are difficult to differentiate. Cost and access, not structure, often determine fund growth.
The filing follows confirmation from the New York Stock Exchange that it has issued a listing notice for MSBT, signaling that the product could begin trading quickly if approved.
If approved by regulators, the fund would be the first spot Bitcoin ETF issued directly by a major U.S. bank, opening a new phase of competition where fees and distribution determine the outcome.
