Morgan Stanley's First Bitcoin ETF Attracts Institutional Investment Amid Market Downturn

Original | Odaily Planet Daily (@OdailyChina)

Author | jk

On April 8, Morgan Stanley officially launched the Morgan Stanley Bitcoin Trust (ticker: MSBT) on the NYSE Arca platform, a subsidiary of the New York Stock Exchange, becoming the first spot Bitcoin ETF ever issued by a major U.S. commercial bank in its own name.

The fund uses Coinbase as the cryptocurrency custodian and BNY Mellon for cash and administrative services. Its most key competitive advantage is its annual fee of 0.14%, the lowest among all spot Bitcoin ETFs currently available in the U.S. market, below BlackRock’s IBIT at 0.25%, Grayscale’s Mini BTC at 0.15%, and Bitwise at 0.20%.

Morgan Stanley is one of the United States' premier investment banks and financial services firms, founded in New York in 1935, with a market cap of approximately $180 billion; it is one of the global systemically important banks (G-SIBs), ranked alongside Goldman Sachs, JPMorgan Chase, and Bank of America as a top Wall Street institution, and has consistently been among the top three globally in IPO underwriting, M&A advisory, and stock brokerage.

On its first day of listing (April 8), MSBT recorded a net inflow of $30.6 million and a trading volume of approximately $34 million, with over 1.6 million shares turnover. Notably, on the same day, the entire Bitcoin ETF market saw a net outflow of $93.9 million, with Fidelity’s FBTC and ARK 21Shares experiencing significant outflows, while only BlackRock’s IBIT and MSBT achieved positive inflows against the trend. In other words, MSBT attracted capital despite the broader market’s outflows. On April 9, following positive market sentiment driven by news of a ceasefire negotiation between the U.S. and Iran, the overall Bitcoin ETF market turned to a net inflow of $304 million. MSBT continued to record a net inflow of $14.9 million, ranking third among all ETFs that day, behind BlackRock’s IBIT ($269.3 million) and Fidelity’s FBTC ($53.3 million).

Entering the following week (Monday, April 13), the market weakened again, with all Bitcoin ETFs returning to net outflows. On Tuesday, April 14, the situation remained similar: Fidelity’s FBTC saw a single-day outflow of $229.2 million, resulting in a total market net outflow of $291 million, while MSBT recorded a positive inflow of $6.28 million, joining BlackRock’s IBIT and Bitwise’s BITB as the only three major Bitcoin ETFs to maintain net inflows that day.

Cumulative data: Since inception, net inflows have totaled $37.5 million; AUM is approximately $63.84 million (Morgan Stanley口径), $70.12 million according to SoSoValue, with a holding of approximately 960 BTC, a market price premium to NAV of 0.57%, and cumulative market price return of +6.86% and NAV return of +6.24% since inception.

The inflow data for MSBT sends a very clear signal in the context of the current market.

Bitcoin sharply corrected after reaching a historic high of $126,198 in October 2025 and is currently trading in a $70,000–$75,000 range, down approximately 44% from its peak. For the first four months of 2026, U.S. spot Bitcoin ETFs experienced four consecutive months of net outflows, reflecting weak market sentiment and retail investors exiting the market.

But what are institutions doing? MSBT’s data provides a good example.

First, in terms of timing, Morgan Stanley spent approximately 18 months preparing this product and chose to launch it when Bitcoin had declined by half from its all-time high and market sentiment was generally pessimistic, rather than entering at the peak of a bull market. Second, despite widespread market pessimism, this ETF has seen continuous inflows against the trend. On April 13 and 14, Bitcoin ETFs across the market experienced significant net outflows (with a single-day outflow of $291 million on the 14th), yet MSBT maintained positive inflows.

This indicates that the funds flowing into MSBT are not hot money shifted from other ETFs due to fee differences.

Third, Morgan Stanley internally recommends a holding allocation of up to 4%. Previously, the firm had advised clients to allocate between 0% and 4% of their portfolios to Bitcoin. With the launch of MSBT, advisors now have an internal, lowest-cost direct tool. If Morgan Stanley’s approximately 16,000 wealth advisors actively recommend this allocation to high-net-worth clients, even a tiny reallocation of the $7 trillion in client assets under management could generate hundreds of millions in sustained inflows. Bloomberg ETF analyst Eric Balchunas has even predicted that MSBT’s AUM could reach $5 billion within one year.

Goldman Sachs is also preparing to enter the market.

Finally, just six days after MSBT’s listing, on April 14, Goldman Sachs announced it had applied to launch its first-ever proprietary Bitcoin ETF, becoming the next major U.S. bank to enter the space after Morgan Stanley.

However, Goldman Sachs’ product is fundamentally different from MSBT. The fund, named the “Goldman Sachs Bitcoin Premium Income ETF,” employs a covered call strategy, aiming to generate consistent premium income by selling options while maintaining exposure to bitcoin. According to the application process, it is expected to list as early as late June to early July 2026.

The fund will allocate at least 80% of its net assets to bitcoin-linked instruments, including spot bitcoin ETPs, related options, and bitcoin ETP index options, while employing a covered call strategy to generate monthly income. Specifically, the fund dynamically adjusts the proportion of options sold between 40% and 100% of its bitcoin exposure—a range designed to allow the fund to consistently collect option premiums in sideways or moderately rising markets, but which may cause the fund to underperform a pure spot ETF during sharp bitcoin rallies due to capped upside gains.

In simple terms, this is a structure that trades part of the upside potential for stable cash flow—regularly distributing option premiums to holders, making it ideal for investors who want to participate in the Bitcoin narrative but prioritize stable cash flow over full price appreciation. Bloomberg ETF analyst Eric Balchunas has therefore dubbed it “Boomer Candy,” tailor-made for traditional institutional investors who want to benefit from Bitcoin’s upside but can’t tolerate high volatility.

Goldman Sachs' entry immediately drove a total daily inflow of $411.5 million across the entire market. This means there's no need to panic in a bear market—Wall Street's leading institutions have already begun positioning collectively.

In its first week of listing, MSBT’s numbers don’t look particularly striking. A cumulative inflow of $375 million pales in comparison to BlackRock’s IBIT, which has reached $55 billion. However, the fact that a century-old institution managing $7 trillion in assets entered at the lowest fee in history, during a 44% Bitcoin pullback and extreme market pessimism, while leveraging 16,000 advisors to consistently recommend it to high-net-worth clients, is a highly significant signal. For readers tracking institutional moves, MSBT’s weekly inflow data will soon become a crucial window into Wall Street’s true sentiment.