Morgan Stanley's 0.14% Bitcoin ETF forces a fee reduction for spot funds

Investors in existing crypto ETFs may switch holdings to reduce management costs. Morgan Stanley launched its spot Bitcoin ETF, MSBT, on April 8 with an expense ratio of 0.14%. The rate undercuts Grayscale's Bitcoin Mini Trust ETF at 0.15% and BlackRock's iShares Bitcoin Trust at 0.25%. To retain assets, other ETF providers must now lower their fees. Morgan Stanley is the first U.S. bank to offer a bitcoin-based ETF, which drew $34 million in investment on its first day of trading. The fund tracks the CoinDesk Bitcoin Benchmark 4PM NY Settlement Rate. The bank's 16,000 wealth advisors, managing between $6.2 trillion and $7 trillion in client assets, can now recommend the fund directly to clients. These advisors can allocate 2% to 4% of growth portfolios to the firm-endorsed vehicle. Other brokerage firms may now engage with Bitcoin ETFs to avoid losing assets under management to Morgan Stanley.