Morgan Stanley plans to price its proposed spot bitcoin exchange-traded funds (ETF) to 14 basis points, a level just below current low-cost options for similar products, according to an amended filing with the US 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 closer to 15 to 25 basis points. The lowest fee on the market today is Grayscale’s Bitcoin Mini Trust ETF which has a cost percentage of 0.15 per cent. Major funds, including BlackRock’s iShares Bitcoin Trust (IBIT), priced their products at 25 basis points.
On paper, the gap looks narrow. In practice, it may be enough to move money.
Spot bitcoin ETFs offer nearly identical exposure. Each fund holds bitcoin and aims to track its price. That leaves cost as one of the few variables investors and advisors can act on. A financial advisor can move a client from one ETF to another with a single trade, keeping the same exposure and lowering annual fees.
This dynamic has shaped the ETF market before, and cheaper products tend to attract inflows, while higher-fee funds can see assets slide over time. Grayscale’s flagship product, Bitcoin Trust (GBTC), has about $10 billion in assets, down from $29 billion at 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 allocation changes across that base could shift billions of dollars between funds.
The price decision also points to strategy. By coming in 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 determine which funds grow.
The filing follows confirmation from the New York Stock Exchange that it has issued a listing notice for MSBT, signaling that the product could start trading soon if approved.
If regulators opt out, the fund would be the first spot bitcoin ETF issued directly by a major U.S. bank, establishing a new phase of competition where fees and distribution drive performance.
