Morgan Stanley’s Bitcoin ETF cuts annual costs for $1 million holders by $1,100

An investor with a $1 million allocation in the MSBT spot Bitcoin ETF pays $1,400 annually, compared to $2,500 for the same position in BlackRock’s iShares Bitcoin Trust (IBIT). This $1,100 annual difference results from Morgan Stanley's 0.14% expense ratio, which is 11 basis points below the 0.25% fee charged by IBIT and Fidelity’s FBTC.

Morgan Stanley launched MSBT on April 8. The firm uses the 0.14% fee as a customer-acquisition cost to draw high-net-worth investors into a wealth platform that offers higher-margin products. To facilitate this, Morgan Stanley's network of 16,000 financial advisors may redirect inflows away from competitors and toward MSBT.

For incumbents, the pricing shift creates a revenue trade-off. BlackRock’s IBIT currently generates approximately $176 million annually from its $70.6 billion in assets. A reduction to 0.14% would cut that revenue to approximately $99 million. BlackRock may cut fees to defend market share if MSBT distribution leads to IBIT outflows by Q3 2026.