Morgan Stanley has launched a Bitcoin exchange-traded product (ETP), drawing more than $100 million in inflows within six days, according to reports.
The product, MSBT, attracted demand before being made available through the firm’s financial advisors, indicating early activity was largely driven by self-directed investors.
Bitcoin ETP demand driven by self-directed investors and institutional interest
The initial inflows suggest investors are allocating to Bitcoin exposure independently, without waiting for advisory guidance.
Amy Oldenburg said, “All of that was self-directed; it was not even available in advisory on the wealth platform,” highlighting that early demand came before advisor distribution.
Bitcoin allocation strategy and advisor adoption gap in wealth management
Morgan Stanley recommends a 2% to 4% Bitcoin allocation for eligible portfolios. However, advisor adoption remains limited compared to client demand.
Oldenburg said this reflects an education gap rather than a lack of interest. Around 80% of ETP exposure on the platform is currently self-directed. The firm is expanding internal training to support advisors.
Morgan Stanley expects Bitcoin to eventually be included on bank balance sheets, though regulatory constraints remain.
Oldenburg said, “The regulatory environment has been more supportive,” but noted that Federal Reserve policies, Basel capital rules, and global compliance requirements still limit broader integration.
Crypto custody, OCC charter plans, and Coinbase BNY Mellon partnership
The firm is pursuing a digital trust charter from the Office of the Comptroller of the Currency (OCC) to enable crypto custody and spot trading.
The MSBT product currently uses Coinbase and BNY Mellon as custodians.
Bitcoin ETF competition: MSBT vs BlackRock iShares Bitcoin Trust (IBIT)
MSBT enters a market led by BlackRock’s iShares Bitcoin Trust (IBIT), which holds more than $61 billion in assets.
Morgan Stanley’s product carries a fee of 0.14%, compared with 0.25% for IBIT. However, IBIT continues to lead in trading volume and market liquidity.
Morgan Stanley’s network of about 16,000 advisors may support future inflows once the product is fully integrated into advisory channels.
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