The Morgan Stanley Bitcoin Trust completed its first month on the market without recording a single day of net redemptions, a streak that no rival spot bitcoin fund matched over the same window.
MSBT launched on April 8 with what Morgan Stanley's head of digital asset strategy Amy Oldenburg called the bank's strongest-ever ETF debut, logging $30.6 million in net inflows and roughly $34 million in trading volume on day one. Bloomberg Senior ETF Analyst Eric Balchunas placed the debut in the top 1% of all ETF launches. That strong open came on a day when the broader spot bitcoin ETF market posted $94 million in net outflows.
SoSoValue data reviewed by The Block shows daily inflows tapering from high-teens millions in MSBT's first two weeks to single-digit millions in later sessions, but never dipping below zero. Over the same window, the total spot bitcoin ETF market swung between a $663.9 million inflow day on April 17 and back-to-back outflows of $277.5 million and $145.7 million on May 7 and May 8.
On May 7, MSBT posted $5.7 million in inflows while BlackRock's IBIT recorded -$27.2 million, Fidelity's FBTC logged -$97.6 million and ARKB posted -$26.6 million, per SoSoValue data. MSBT was trading at a 0.24% premium to NAV, higher than IBIT's 0.18% and FBTC's 0.13%, suggesting demand was outpacing creation unit supply.
Within six trading days of launch, MSBT had crossed $103 million in total net inflows, surpassing the $86 million all-time cumulative total of WisdomTree's BTCW, a fund that has been trading since January 2024.
The low-fee angle
MSBT's 0.14% annual sponsor fee is the lowest among all U.S. spot bitcoin ETFs, undercutting the Grayscale Bitcoin Mini Trust at 0.15%, Bitwise's BITB at 0.20%, ARKB at 0.21%, and both IBIT and FBTC at 0.25%. Grayscale's original GBTC still charges 1.50%.
Whether the fee discount is driving MSBT's stickiness is unclear. The 11-basis-point gap between MSBT and IBIT is negligible on a retail position, but at institutional scale it amounts to $1.1 million annually per $1 billion invested.
The Grayscale Bitcoin Mini Trust, MSBT's closest fee competitor at 0.15%, saw a choppier flow profile over the same window, recording at least one outflow day and generally smaller daily inflows despite holding $4.3 billion in net assets, per SoSoValue data.
Advisor channel still waiting
Nearly all of MSBT's first-month inflows came from self-directed clients, per the company. Morgan Stanley operates roughly 16,000 financial advisors managing over $9.3 trillion in client assets, but the fund was not available on the bank's advisory wealth management platform during its first weeks.
"Almost all of that first week or two of activity was self-directed, meaning it was not our advisors that were selling this," Amy Oldenburg, Morgan Stanley's head of digital assets, said at the Consensus conference in Miami.
Once that channel fully opens, MSBT would gain a proprietary distribution pipeline that no other bitcoin ETF issuer can match. The bank is also piloting spot crypto trading on E*Trade with a 50-basis-point transaction fee, starting with bitcoin, ether and solana.
Broader market context
MSBT's first month coincided with a broader recovery in spot bitcoin ETF demand. The 13 U.S. spot bitcoin funds drew more than $3 billion in net inflows across six consecutive weeks through May 8, the longest weekly inflow streak since last summer, per SoSoValue. Total net assets across the category stood at $106.6 billion, representing 6.67% of bitcoin's market capitalization, with cumulative net inflows of $59.3 billion since the category's January 2024 launch.
Balchunas projected MSBT could hit $5 billion in AUM within its first year. At its current run rate, that target would require the advisor channel to meaningfully accelerate inflows.
Bitcoin was trading at approximately $80,840 at the time of publication, according to The Block's Bitcoin Price page.