Morgan Stanley's 0.14% bitcoin ETF could force rivals to cut fees, but liquidity still favors BlackRock
FD
Finley Davenport
Bitcoin ETF · Apr 10, 2026
Source: The Digital Ledger Data Terminal
Morgan Stanley’s new bitcoin spot ETF, MSBT, launched on April 8 with a 0.14% expense ratio — the lowest in the U.S. market. That’s 11 basis points below BlackRock’s iShares Bitcoin Trust (IBIT), the dominant player with $55 billion in assets. On its first day, MSBT pulled in $30.6 million in net inflows and traded over 1.6 million shares, a debut Bloomberg analyst Eric Balchunas ranked in the top 1% of all ETF launches.
MSBT undercuts not only IBIT but also Grayscale’s Bitcoin Mini Trust (BTC) at 0.15% and Fidelity’s FBTC at 0.25%. With all bitcoin spot ETFs holding the same underlying asset, fees are one of the few levers managers can pull to compete. That makes MSBT’s pricing a direct threat to smaller players, who now face pressure to lower costs or lose share.
But IBIT still holds a commanding edge in liquidity — tight spreads, low trading costs, and robust options markets — all critical for institutional investors. Balchunas sees little chance BlackRock will cut fees immediately, given that advantage. James Seyffart, another Bloomberg analyst, agrees that MSBT won’t match IBIT’s liquidity anytime soon.
Where MSBT could gain ground is through Morgan Stanley’s distribution power. The firm’s wealth management arm employs 15,000 to 16,000 financial advisers overseeing $9.3 trillion in client assets. Those advisers may increasingly favor the firm’s own ETF over external options, creating a built-in channel for growth.
The broader market environment adds pressure. After surpassing $100 billion in total assets since launch in January 2024, bitcoin ETFs saw net outflows for four straight months from November 2025 to February 2026. In March 2026, inflows returned with $1.32 billion entering the market — a rebound MSBT now aims to capture.
Whether MSBT sustains momentum beyond its first-day success will determine if it reshapes investor flows. If it does, fee cuts across the sector become more likely — even if BlackRock holds firm for now.
Bitcoin ETF
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