Morgan Stanley has officially entered the digital investment space with the launch of the Morgan Stanley Bitcoin Trust (MSBT), a type of exchange-traded product (ETP), which is represented on the New York Stock Exchange Archipelago (NYSE Arca) and will track the value of Bitcoin (BTC) in terms of its price against the U.S. dollar (USD). To determine the value of an MSBT share, Morgan Stanley utilizes CoinDesk’s Bitcoin Benchmark 4PM NY Settlement Rate, which is derived from aggregated trade flows transacted on various major Bitcoin spot exchanges.
Importance of This Development
Morgan Stanley is the very first U.S.-based commercial bank-affiliated investor to make available an ETP with regard to crypto. By bringing their USD 1.9 trillion asset management portfolio, global sales channel network, and long-standing relationships with institutional investors into the mix, the launch of the MSBT, along with the current growth of Morgan Stanley’s investments within the broader digital asset marketplace (such as their establishment of dedicated digital asset leadership, as well as expanded capabilities around custody related services and trading and product development) should provide them with a competitive advantage.
Morgan Stanley Bitcoin Trust (MSBT) vs BlackRock IBIT
The annual sponsor fee for this product of 0.14% should be very attractive to a potential cost-conscious institutional investor base. Morgan Stanley has also turned to Coinbase and BNY as its providers of digital asset custody services while utilizing BNY to serve as the MSBT’s administrator, transfer agent, and provider of accounting records and/or record-keeping and cash management services for this investment product.
What Happens Next
Morgan Stanley’s decision to provide a Bitcoin ETP might force other major asset management firms (especially bank-owned firms such as Goldman Sachs or JPMorgan) to create ETPs as well. Additionally, this trust may provide a roadmap for Morgan Stanley Investment Management (MSIM)’s future crypto ETPs, including possible product offerings for Ethereum and other digital currencies.
In the meantime, the Bitcoin price has jumped around 5.2% in 24 hours (at the time of writing), triggered by today’s U.S.-Iran Ceasefire. In the first hour, after the announcement, the price reached up to USD 72,700 and corrected the following hour. Now is still trying to break its current resistance, trading between USD 71,300 and USD 71,600, as shown in the graphic above. Investors/traders are taking this cautiously as geopolitical tensions can erupt again at any moment.
