US Spot Bitcoin ETFs are gearing up for a showdown in April as Morgan Stanley’s product aims to undercut rivals with 44% lower fees. The investment bank proposed a 0.14% management fee on its MSBT product on Friday, according to a refiled S-1 form.
This would be cheaper than the current lowest rates of 0.15% charged by Grayscale Mini. Compared to the current market leader, BlackRock’s iShares Bitcoin Trust (IBIT) 0.25% fee, Morgan Stanley’s fees will be 44% lower.
As the cheapest option, Morgan Stanley’s MSBT will have an “opportunity to acquire outside assets,” according to Bloomberg ETF analyst Eric Balchunas. This suggested it could attract flows of rivals and new locations, with the analyst calling it a ‘semi-shock’.
Balchunas added that MSBT could debut in two weeks and be a game-changer.
This (Morgan Stanley) will be the first bank to release a Spot BTC ETF, and this bank happens to have 16,000 advisors managing $6 trillion in assets. They are the ultimate gatekeepers of the rich boomers’ money.
Will Fee Wars Change Spot BTC ETFs?
Balchunas’ outlook reflected Strategy CEO Phong Le’s prediction that Morgan Stanley could easily surpass BlackRock’s IBIT by “monster” flows. The bank is an important distribution channel for IBIT, and the fact that its MSBT is cheaper could put BlackRock at a disadvantage.
At the time of writing, IBIT saw cumulative net inflows of $63 billion and $52 billion in net assets. Fidelity’s FBTC came in second with $12 billion in net assets – almost a five-fold difference from IBIT.
Meanwhile, BlackRock led Friday’s outflow with $201 million in redemptions. In total, the ETFs lost $225 million as of March 27. This dragged BTC down to $65,000 while erasing almost all of March’s gains. However, it seemed unclear whether this was related to the Morgan Stanley update or not.
Zoomed out, however, the outflows from the Spot BTC ETFs had slowed by the end of Q1 2026. The 90-day average flow showed that selling pressure fell from $72 million in January to $6 million at the end of March – a 92% drop in redemptions.
During the period, BTC was between $60,000 and $75,000. If Spot BTC ETFs reverse net outflows in the first quarter and turn positive in the second quarter of 2026, the crypto asset could perhaps attempt a bullish breakout from the range.
Final summary
- Morgan Stanley’s Bitcoin ETF could launch in two weeks, and its cheapest 0.15% management fee could spark competition.
- In the first quarter, net sell-offs of BTC ETFs fell 92%, but it was unclear whether these would go to net buyers in the second quarter.