Morgan Stanley plans to price its proposed bitcoin spot exchange-traded fund (ETF) by 14 basis points, a level just below current low-cost options for similar products, according to an amended filing with the U.S. Securities and Exchange Commission (SEC). The move could trigger a new round of fee competition among existing funds.
The latest S-1 filing, filed Friday, shows the bank undercuts rivals that charge 15 to 25 basis points. The lowest fee on the market today is Grayscale’s Bitcoin Mini Trust ETF which carries an expense ratio of 0.15%. The largest funds, including BlackRock’s iShares Bitcoin Trust (IBIT), priced their products at 25 basis points.
On paper, the gap seems narrow. In practice, simply transferring money may be enough.
Bitcoin spot ETFs offer almost identical exposure. Each fund holds bitcoins and aims to track its price. That leaves cost as one of the few variables that investors and advisors can act on. A financial advisor can move a client from one ETF to another with a single trade, maintaining the same exposure and reducing annual fees.
That dynamic has shaped the ETF market before, with lower-cost products tending to attract inflows, while funds with higher fees may see assets disappear over time. Grayscale’s flagship product, its Bitcoin Trust (GBTC), has around $10 billion in assets, up from $29 billion at its launch in January 2024.
Morgan Stanley’s scale adds another layer. Its wealth management arm oversees trillions in client assets and has one of the largest advisor networks in the industry. Even small changes in allocation on that basis could move billions of dollars between funds.
The price decision also points to strategy. By entering with a lower fee, Morgan Stanley may be aiming to quickly gain share in a market where products are difficult to differentiate. Cost and access, not structure, often decide which funds grow.
The filing follows confirmation from the New York Stock Exchange that it has issued a listing notice for MSBT, indicating the product could begin trading quickly if approved.
If approved by regulators, the fund would be the first spot bitcoin ETF issued directly by a major US bank, establishing a new phase of competition where fees and distribution drive the outcome.
