Morgan Stanley has submitted an application for a new bitcoin ETF with a remarkably low fee of only 14 basis points, significantly lower than the 25 basis points charged by the current market leader, BlackRock’s IBIT ETF.
Analysts say Morgan Stanley’s aggressive pricing is a strategic move to rapidly gain market share and distribution, even if the ETF itself generates minimal revenue, as it serves as a gateway to offering higher-margin digital asset products through the bank’s vast advisor network, News.Az reports, citing foreign media.
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Why it matters
The bitcoin ETF fee war is heating up, with major Wall Street players like Morgan Stanley using rock-bottom pricing to try to dominate the market. This could drive down costs for investors, but also signals a broader push by traditional finance to integrate cryptocurrencies and tokenized assets into mainstream investment products and distribution channels.
The details
Morgan Stanley’s proposed MSBT bitcoin ETF would charge just 14 basis points, undercutting BlackRock’s IBIT ETF by 44% at 25 basis points. This aggressive pricing, even below the 3-10 basis point range of many traditional equity index ETFs, suggests Morgan Stanley is willing to absorb thin margins on the bitcoin ETF itself in order to rapidly gain market share and distribution. Analysts say the bank likely views the bitcoin ETF as a ‘gateway drug’ to offering higher-margin digital asset products like tokenized real-world assets and yield-generating vaults through its network of over 16,000 financial advisors overseeing $6 trillion in client assets.
