Morgan Stanley filed The U.S. Securities and Exchange Commission has approved the launch of a bitcoin spot exchange-traded funds. This is the first time that a U.S. major bank sought to have an ETF directly tied to bitcoin’s price.
Morgan Stanley Bitcoin Trust is an exchange traded fund that tracks the bitcoin price, including fees and expenses.
The registration statement states that if the application is approved, bitcoin would be held directly by the fund, rather than using derivatives, futures contracts, or leverage.
Move places Morgan Stanley Asset managers have been dominating the Bitcoin ETF market ever since the U.S. regulators first approved spot products early in 2024.
These funds manage assets worth more than $120 Billion, which is a significant share of the total value of Bitcoin. A large portion of this growth was attributed to bitcoin-only investment products offered by firms like BlackRock and Fidelity.
Morgan Stanley’s entrance signals that large banks are moving away from the distribution of third-party cryptocurrency products and toward releasing their own.
Up until relatively recently, U.S. banking institutions dominated the market. limited their role The banks cited regulatory uncertainty, risk management and other factors as reasons for refusing to offer custody and brokerage. This stance is beginning to shift as federal agencies clarify how banks are allowed to engage in digital assets.
The Office of the Comptroller of the Currency released its December report. said Banks may be able to act as an intermediary for cryptocurrency transactions. This will help bridge the gap between digital and traditional markets. SEC also changed listing standards for crypto spot ETFs to make it easier for new issuers.
Morgan Stanley invests more in Bitcoin
Morgan Stanley Investment Management will sponsor the bitcoin trust. Authorized participants would create and redeem shares in large batches, in either cash or kind.
The net asset value of the fund would be determined daily by using a benchmark price based on major Bitcoin exchanges. Retail investors could trade shares in a secondary exchange through their standard brokerage account.
Morgan Stanley has taken steps to extend crypto access in its Wealth Management business. The filing was made in October. bank widened eligibility All clients and account types are included in the crypto investment.
A bitcoin-specific ETF allows the company to add the product directly to client portfolios while retaining management fees, which might have otherwise gone towards rival issuers.
This move is also reflective of the economics behind the Bitcoin ETF market. Bitcoin spot funds are amongst the most popular products in the U.S. ETF sector, seeing steady flows even in times of high volatility. BlackRock’s Bitcoin ETF emerged As one of the top revenue contributors in its first year.
Morgan Stanley has also submitted paperwork to establish a fund linked to Solana. However, institutional demand remains centered on bitcoin. The majority of assets held in U.S. Crypto ETFs is concentrated in Bitcoin products. Funds linked to other tokens attracted limited capital.
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Source: bitcoinmagazine.com
