Is the market underestimating the potential impact of the upcoming Morgan Stanley spot Bitcoin ETF? Well, Strategy CEO Phong Le thinks so.
According to him, the investment bank’s asset management segment could easily turn around BlackRock’s IBIT.
He added,
Morgan Stanley Wealth Management oversees approximately $8 trillion in assets under management and recommends a bitcoin allocation of 0-4%. A 2% allocation would represent $160 billion, ~3x the size of IBIT. $MSBT: Monster Bitcoin.
For perspective, BlacRock’s iShares Bitcoin ETF (IBIT) currently leads the segment with cumulative net inflows of $63 billion and assets under management (AUM) of $55 billion. Therefore, the projection of $160 billion would be three times larger than IBIT’s current assets under management.
“Still early?” – Why Morgan Stanley is betting on BTC
Since the first wave of U.S. spot BTC ETFs debuted in early 2024, Morgan Stanley has primarily been a distributor, allowing advisors to recommend third-party offerings like BlackRock’s IBIT. Access commissions are established for this purpose.
As of the third quarter of 2025, BlackRock’s IBIT printed nearly $191 million in management fees and was the third-highest revenue-generating product in its ETF lineup.
A few months later, Morgan Stanley applied to directly offer its BTC ETF product (MSBT). It filled in again the application and could start trading soon. This would ultimately help capture both distribution and management costs.
As the US spot BTC ETFs enter their third year and IBIT’s dominance continues, one might wonder why Morgan Stanley is suddenly making its bold bet in this area.
According to Amy Odelnburg, the firm’s head of crypto, adoption was “still early,” adding that current demand comes mainly from self-directed investors rather than wealth advisor-managed accounts.
Even the distribution of these ETFs, about 80% of what we see on our platform, comes through self-directed activities.
The company is involved in lending, trading and even storing BTC and is said to be the first US bank to directly offer a BTC ETF.
That said, Joe Takayama from Backpack warned that the expected demand of $160 billion could still be unrealistic as the allocation could be below 2% or even close to zero. Meanwhile, BTC ETFs’ strong recovery from early March has reversed, with consecutive daily outflows over the past three trading days.
Amid ongoing macro uncertainty, continued risk aversion by ETF investors could derail BTC’s recovery. At the time of writing, the asset was trading at $70,000.
Final summary
- Strategy CEO Phong Le predicted that the Morgan Stanley BTC ETF could easily generate $160 billion in demand.
- Morgan Stanley said institutional adoption of cryptocurrencies is still early, with current demand driven primarily by self-directed investors rather than advisor-managed accounts.