Morgan Stanley Spot Bitcoin ETF Posts No Outflows in First Month, Signaling Steady Demand

Morgan Stanley’s spot Bitcoin exchange-traded fund drew money every day in its first month after launch, underscoring steady demand.

SoSoValue data cited by The Block on May 10 showed that Morgan Stanley’s spot Bitcoin ETF, MSBT, did not record a single day of net outflows in the month since its April 8 debut. That marks a contrast with other spot Bitcoin ETFs, which swung between inflows and outflows over the same period.

MSBT opened strongly, posting $30.6 million in net inflows and about $34 million in trading volume on its first day. That came even as the broader spot Bitcoin ETF market logged $94 million in net outflows, pointing to relatively firm early demand for the fund.

Inflows have slowed since then, but the streak has remained intact. Daily net inflows have eased from tens of millions of dollars in the early days to the low millions more recently, without turning negative. On May 7, MSBT recorded $5.7 million in net inflows, while major peers including BlackRock’s IBIT, down $27.2 million, Fidelity’s FBTC, down $97.6 million, and Ark’s ARKB, down $26.6 million, all posted net outflows.

Demand is also reflected in pricing. MSBT traded at a 0.24% premium to net asset value, compared with 0.18% for IBIT and 0.13% for FBTC. That suggests market demand is outpacing the supply of newly created shares.

The fund’s fee structure has also drawn attention. MSBT charges an annual management fee of 0.14%, among the lowest in the US spot Bitcoin ETF market. For institutional investors, that could amount to an annual cost difference of about $1.1 million on a $1 billion investment.

So far, however, inflows appear to have come mainly from retail investors. Morgan Stanley has about 16,000 advisers and oversees $9.3 trillion in assets, but the ETF was not included in its advisory channel at launch.

A broader opening of that channel could bring in additional money. The market is now watching whether MSBT can reach $5 billion in assets under management in its first year.

The US spot Bitcoin ETF market has also shown signs of recovery. The 13 funds recorded net inflows for six straight weeks through early May, lifting cumulative net inflows to about $59.3 billion. Total assets under management stood at about $106.6 billion, or roughly 6.7% of Bitcoin’s market capitalization.