Morgan Stanley Investment Management, part of Morgan Stanley (NYSE:MS), pushing ahead with its bid to launch a spot Bitcoin exchange-traded fund, submitting a second amendment to its Form S-1 registration statement with the US Securities and Exchange Commission (SEC). This latest filing for the Morgan Stanley Bitcoin Trust, known internally as the MSBT product, refines key operational elements and brings the proposal closer to potential trading on the NYSE Arca exchange under the ticker symbol MSBT.
The move underscores the banking institution’s commitment to deepening its footprint in digital assets, transitioning from merely facilitating client access to third-party offerings to becoming a direct sponsor and issuer.
The trust, structured as a Delaware statutory trust formed late in 2025, is designed as a passive investment vehicle.
Its primary goal is to mirror the daily performance of Bitcoin’s spot price, measured against the CoinDesk Bitcoin Benchmark 4 p.m. New York settlement rate, after accounting for expenses.
Investors would gain indirect exposure to the cryptocurrency through shares representing fractional ownership of actual Bitcoin holdings stored securely offline.
Unlike active strategies, the fund will avoid leverage, derivatives, or speculative trading, focusing solely on price tracking.
Creations and redemptions will occur in standardized baskets of 10,000 shares, supporting both in-kind transfers of Bitcoin and cash-based transactions to enhance flexibility for authorized participants such as Virtu Americas, Jane Street Capital, and Macquarie Capital.
A notable addition in the updated filing is the seed capital arrangement.
The delegated sponsor plans to acquire an initial 50,000 shares—equivalent to five full baskets—for approximately $1 million in proceeds.
These funds will be used to purchase Bitcoin via designated counterparties, establishing the fund’s starting holdings.
Coinbase Custody Trust Company and The Bank of New York Mellon will serve as Bitcoin custodians, employing multi-layered cold storage with insurance coverage for theft or fraud (though not for price fluctuations).
BNY Mellon will additionally handle cash custody, administration, valuation, and transfer agency duties, while Coinbase acts as prime broker for transaction routing.
A unitary delegated sponsor fee, covering most routine operating costs like marketing and regulatory expenses, will be accrued daily based on net asset value, though the precise rate remains undisclosed pending further refinements.
This development builds on Morgan Stanley’s initial S-1 submission from January 6, 2026, which also included plans for a Solana-focused trust.
The bank, managing roughly $1.9 trillion in assets, has gradually expanded its crypto services.
Since 2024, it has permitted financial advisors to recommend existing Bitcoin ETFs to clients, including those from established players like BlackRock.
By sponsoring its own product, Morgan Stanley could capture management fees directly and position itself as the first major U.S. bank to issue a spot Bitcoin ETF outright.
The filing arrives as the SEC reviews more than 100 pending cryptocurrency-related applications, highlighting sustained institutional interest despite ongoing regulatory scrutiny.
For investors, the proposed ETF offers a regulated, accessible way to participate in Bitcoin’s growth without the complexities of direct wallet management, private keys, or custody risks.
It could improve market liquidity and arbitrage efficiency through established Wall Street infrastructure.
However, the prospectus emphasizes inherent challenges, including Bitcoin’s notorious volatility—marked by sharp drawdowns in past cycles—cybersecurity threats, potential network forks, and evolving global regulations that might impose new costs or restrictions.
If approved by the SEC and listed on NYSE Arca, the Morgan Stanley Bitcoin Trust would represent a milestone in mainstream finance’s embrace of cryptocurrencies.
It signals confidence that Bitcoin has matured into a legitimate asset class worthy of institutional-grade products.
While approval timelines remain uncertain amid a crowded pipeline, the updated filing demonstrates Morgan Stanley’s proactive approach in an increasingly competitive landscape.
This initiative, paired with its parallel Solana efforts, could pave the way for broader retail and advisory adoption, further bridging traditional finance and digital innovation. As the crypto sector evolves, such products may normalize Bitcoin exposure for diversified portfolios worldwide.
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