The Morgan Stanley Bitcoin Trust (MSBT), the first spot exchange-traded fund (ETF) offered by a U.S. bank, recorded inflows of $30.6 million in its first trade, giving the Wall Street bank a respectable, but not successful, entry into the spot Bitcoin ETF market.
MSBT began trading on the NYSE Arca exchange on Wednesday, achieving trading volume of $34 million, slightly more than the forecast of Bloomberg ETF analyst Eric Balchunas, who expected first-day trading volume to reach $30 million.
As of April 8, MSBT owned 444.4 bitcoins (BTC), worth about $31.7 million, representing about 0.03% of the total 1.29 million BTC held by US spot bitcoin ETFs.
Morgan Stanley’s ETFs offer the lowest fees among their peers, trailing only BlackRock’s iShares Bitcoin Trust (IBIT) on the day, which saw $40 million in inflows, highlighting competition in a market dominated by a few large issuers.
The debut isn’t so much a challenge for BlackRock as it is a sign that traditional finance still sees room in Bitcoin ETFs, but Morgan Stanley is arriving two years late to the market with a 2024 launch class setting a much higher bar for first-day demand.
The overall Bitcoin ETF is running negative amid outflows from FBTC and ARKB
Inflows from IBIT and MSBT were not enough to offset selling from other funds, with the Fidelity Wise Origin Bitcoin Fund (FBTC) and ARK 21Shares Bitcoin ETF (ARKB) seeing outflows of $79 million and about $75 million, respectively, according to Farside data.
Grayscale Bitcoin Trust ETF (GBTC) added another $11 million in redemptions, bringing the total daily outflows from U.S. Bitcoin ETFs to $124.5 million.
The outflows mark two straight days of selling, following outflows of $159 million on Tuesday, after funds recorded inflows of $471 million on Monday, the largest daily inflows since late February.
Related to: Canary Capital is applying for a US-based spot PEPE ETF
MSBT is tracking a launch wave for 2024
MSBT’s debut was modest compared to the January 2024 wave of launches that followed the SEC’s approval of the first U.S. bitcoin ETFs.
GBTC and IBIT handled $2.3 billion and $1 billion in opening day volume, respectively. IBIT saw inflows of about $112 million on its first day, while GBTC recorded outflows of $95 million.
Despite its delay, Morgan Stanley’s Bitcoin ETF is still on track to be among the best ETFs launched last year, according to Bloomberg’s Balchunas.
The ETF analyst pointed to funds like the Bitwise Solana Scking ETF (BSOL), Canary XRP ETF (XRPC) and Roundhill Memory ETF (DRAM), highlighting a volume threshold of $60 million.
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