Morgan Stanley Bitcoin Trust defies ETF volatility with zero outflow first month streak

Morgan Stanley Bitcoin Trust just wrapped its first month on the market without a single day of net outflows. Since it started trading on April 8, MSBT has seen $193 million flow in, with total assets now topping $240 million.

Right out of the gate, the ETF showed promise from day one. It hit its stride with $30.6 million in deposits and $34 million in trading volume.

Amy Oldenburg, the head of digital asset strategy at Morgan Stanley even hailed it as the firm’s best ETF debut to date.

Bloomberg’s Eric Balchunas also stated the fund’s opening performance puts it in the 99th percentile of all-time ETF debuts. 

The streak is notable because rival U.S. spot Bitcoin ETFs, including products from BlackRock, Fidelity Investments, and ARK Invest, have experienced net outflows over the same period as Bitcoin prices fluctuated between the mid-$70,000 and low-$80,000 range.

MSBT’s resilience comes as the broader U.S. spot Bitcoin ETF market extended a six-week streak of inflows. Analysts say Morgan Stanley’s aggressive pricing strategy has helped differentiate the fund.

MSBT charges a 0.14% sponsor fee, currently among the lowest in the U.S. spot Bitcoin ETF market, undercutting several established competitors.

MSBT outpaced competitors in the more recent trading sessions

SoSoValue data highlights a perfect first month for the MSBT. The fund recorded 17 days of inflows and five flat days, but absolutely no redemptions.

Only six trading days into its debut, MSBT had already drawn in more than $103 million from investors, topping BTCW’s all-time cumulative inflows of $86 million.

Not to mention, over the last two trading sessions, it managed to raise $13 million in fresh investment while its competitors were hammered by $422 million in combined exits. 

On a rough day for the industry (May 7), MSBT managed to attract $5.7 million while rivals like Fidelity and BlackRock saw double-digit millions in net redemptions.

Fidelity lost nearly $100 million, BlackRock dropped over $27 million, and ARKB saw $26.6 million in exits.

With a 0.24% premium to its net asset value, MSBT also showed more buy pressure than IBIT or FBTC, meaning demand was outstripping the supply of new shares. 

Data from Bitcoin Treasuries shows MSBT holds close to 2,620 Bitcoin, making it the 32nd-largest Bitcoin-holding ETF or exchange. Despite its smaller size compared to major spot funds, institutional investors appear committed for the long haul. 

What boosted Morgan Stanley’s ETF performance?

Morgan Stanley’s 0.14% fee is the lowest on the market, coming in cheaper than Bitwise (0.20%), ARKB (0.21%), and the 0.25% charged by IBIT and FBTC.

The discounted pricing offered by MSBT might be helping retain investors. Though an 11-basis-point difference from IBIT means little to retail traders but could save institutions around $1.1 million per year for every $1 billion invested.

SoSoValue also shows that Grayscale’s Mini Trust had a much more hit-or-miss month than MSBT, despite both having almost identical fees. 

Per the company, self-directed clients made up nearly all of fund’s first-month inflows. During those early weeks, the ETF was still absent from Morgan Stanley’s advisory wealth management offering.

Oldenburg confirmed, “Almost all of that first week or two of activity was self-directed, meaning it was not our advisors that were selling this.”

MSBT debuted at a time when investor appetite for spot Bitcoin ETFs was strengthening again. According to SoSoValue, the 13 U.S. spot Bitcoin funds extended their inflow streak through May 8.

To some, the $3 billion that flowed into Bitcoin ETFs over the six weeks provided a strong backdrop for MSBT’s first month on the New York Stock Exchange.

Since debuting in January 2024, the spot Bitcoin ETF category has attracted $59.3 billion in cumulative net inflows, with overall assets rising to $106.6 billion.

Morgan Stanley escalates Japan push with senior hire

On related development, Morgan Stanley has hired Naoyuki Kumon, formerly Société Générale’s head of sales to Japan’s regional financial institutions, as global investment banks intensify competition for business from smaller local lenders.

Kumon left Société Générale earlier this year and joined Morgan Stanley MUFG Securities this week in a similar role, according to people familiar with the matter who requested anonymity due to the sensitivity of the information.

Spokespeople for both Morgan Stanley MUFG Securities and Société Générale declined to comment.

The move comes as Japan’s regional banks restructure their balance sheets amid a shifting economic environment, opening new opportunities for both domestic and foreign brokerages to offer tailored financial products. For example, Fukuoka Financial Group, the country’s largest regional banking group, has been increasing allocations toward overseas private assets and infrastructure financing.

Morgan Stanley has been actively strengthening its presence in this segment. Two years ago, it recruited three former UBS Group employees to expand sales of structured investment products to regional lenders.

Rival firms are also stepping up hiring. UBS’s securities arm has recently brought in Kazuhiko Fukaya, formerly Goldman Sachs’ head of sales to Japanese regional banks, alongside several other senior hires over the past year aimed at deepening coverage of the same client base.