Wall Street Giant Morgan Stanley Launches! Will It Shake Up the Bitcoin Fund Market?

▲ Bitcoin (BTC), Morgan Stanley/ChatGPT generated image ©

Morgan Stanley, a giant in traditional American finance, has finally made a significant first move by entering the Bitcoin (BTC) spot ETF market, but it appears insufficient to overcome the dominance of BlackRock, which already enjoys a first-mover advantage. Despite wielding an unprecedentedly low fee as its weapon, it exposed the limitations of a latecomer, illustrating the harsh reality and fierce competitive landscape of the fund market.

According to investment media FXStreet on April 9 (local time), Morgan Stanley's Bitcoin spot ETF, the first launched by a US bank, had a smooth debut, recording a net inflow of $30.6 million on its first day of trading. The fund, which began trading on NYSE Arca, recorded a trading volume of $34 million, slightly surpassing the $30 million first-day trading volume predicted by Bloomberg analyst Eric Balchunas.

As of April 8, Morgan Stanley's fund held 444.4 Bitcoins, valued at approximately $31.7 million, which accounts for 0.03% of the 1.29 million Bitcoins held by all US spot Bitcoin ETFs. Morgan Stanley engaged in aggressive marketing by setting the lowest fees in the industry, but it had to settle for second place in inflows, trailing behind BlackRock's fund, which attracted $40 million on its launch day.

Despite the new fund's strong performance, it was insufficient to prevent overall capital outflows from the cryptocurrency market. Fidelity's fund saw an outflow of $79 million, Ark 21Shares' fund saw $75 million, and Grayscale's fund experienced redemptions of $11 million, leading to a total net outflow of $124.5 million in the US Bitcoin spot ETF market on that day. Despite a massive $471 million inflow on Monday, the selling trend continued for two consecutive days, following a $159 million outflow on Tuesday.

Morgan Stanley's debut performance is somewhat modest when compared to the explosive demand seen when the first-generation funds launched in January 2024. At that time, Grayscale and BlackRock funds recorded overwhelming trading volumes of $2.3 billion and $1 billion, respectively, on their first day, with BlackRock's fund attracting $112 million in a single day.

Nevertheless, Eric Balchunas noted the $60 million trading volume benchmark for recently launched products like the Canary Capital XRP (Ripple) spot ETF, evaluating Morgan Stanley's debut as one of the best fund launches over the past year. This is interpreted as a positive sign that Wall Street's giant traditional financial institutions remain confident in the long-term growth potential of the crypto asset fund market.

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