Morgan Stanley’s MSBT avoids outflows through the first month of trading

Morgan Stanley’s spot bitcoin ETF has completed its first month without a single day of net outflows, even as larger rival funds posted repeated redemption sessions during the same period.

SoSoValue data reviewed by crypto.news showed Morgan Stanley’s MSBT continued attracting fresh capital every trading day since its April 8 launch, while the broader U.S. spot bitcoin ETF market alternated between large inflow and outflow sessions. On May 7 alone, MSBT added $5.7 million as BlackRock’s IBIT lost $27.2 million, Fidelity’s FBTC shed $97.6 million, and ARKB recorded $26.6 million in outflows.

Launching into a weak session for the ETF sector, MSBT drew $30.6 million in first-day inflows and roughly $34 million in trading volume while the broader category saw $94 million leave spot bitcoin funds. 

Bloomberg Senior ETF Analyst Eric Balchunas later said the debut ranked among the top 1% of ETF launches.

Within six trading sessions, the fund had crossed $103 million in cumulative inflows, overtaking WisdomTree’s BTCW, which has operated since January 2024 and has gathered roughly $86 million in total net inflows over its lifetime.

Low fee strategy gains traction

MSBT entered the market with a 0.14% sponsor fee, the lowest among all U.S. spot bitcoin ETFs. Grayscale’s Bitcoin Mini Trust charges 0.15%, Bitwise’s BITB charges 0.20%, ARKB charges 0.21%, while both IBIT and FBTC sit at 0.25%. Grayscale’s legacy GBTC fund still carries a 1.50% fee.

The pricing difference appears marginal for smaller investors but scales quickly for institutions, with an 11 basis point gap between MSBT and IBIT translating to roughly $1.1 million annually on a $1 billion allocation.

Trading activity also pointed to sustained demand pressure. SoSoValue data showed MSBT traded at a 0.24% premium to net asset value on May 7, above IBIT’s 0.18% and FBTC’s 0.13%.

Morgan Stanley’s crypto expansion has extended beyond ETFs. As crypto.news previously reported, the bank launched a pilot crypto trading service on ETrade on May 6 with a flat 0.5% transaction fee for bitcoin, ether, and solana trades executed through Zerohash infrastructure. 

Bloomberg reported that Morgan Stanley is below Coinbase, Fidelity, and Charles Schwab on retail crypto trading costs.

Eric Balchunas said competitors were unlikely to leave the pricing unchanged and compared the situation to the fee compression battle that followed the launch of spot bitcoin ETFs.

Advisors yet to fully enter

Almost all early inflows into MSBT came from self-directed investors rather than Morgan Stanley’s advisory network.

“Almost all of that first week or two of activity was self-directed, meaning it was not our advisors that were selling this,” Amy Oldenburg, Morgan Stanley’s head of digital assets, said at the Consensus conference in Miami.

Morgan Stanley oversees roughly $9.3 trillion in client assets through roughly 16,000 financial advisors, although the bank had not yet opened MSBT access across its wealth management platform during the fund’s first weeks.

Once integrated into that channel, the ETF would gain access to one of the largest distribution systems tied to a U.S. financial institution. Morgan Stanley is also developing a proprietary digital wallet expected later in 2026 that would hold cryptocurrencies alongside tokenized stocks, bonds, and real estate assets.

MSBT’s first month coincided with renewed demand across the U.S. spot bitcoin ETF sector. SoSoValue data showed the 13-spot bitcoin funds attracted more than $3 billion across six straight weeks through May 8, the longest positive streak since mid-2025. Total assets across the category reached $106.6 billion, equal to 6.67% of bitcoin’s market capitalization, while cumulative inflows since launch climbed to $59.3 billion.

Balchunas projected MSBT could eventually reach $5 billion in assets under management during its first year, though he indicated advisor-driven flows would likely need to accelerate for the fund to maintain its current pace.