Bitcoin ETF Market Sees Intense Competition with Morgan Stanley's MSBT

The Bitcoin ETF market is experiencing intense competition among major players like Fidelity's FBTC and BlackRock's IBIT. Morgan Stanley's MSBT, a spot Bitcoin ETF issued directly by a major U.S. bank, has entered the market with an annual expense ratio of 0.14%, lower than the 0.25% held by both FBTC and IBIT.

The approval of spot Bitcoin ETFs in 2024 allowed institutional capital to enter the market without needing to manage private keys or wallets, providing a legal path for big investors to get exposure to BTC. MSBT began trading on April 8, 2026, and as of its June 30, 2026, filing, it held 5,059 BTC and roughly $299 million in net assets.

The era of fee waivers ended in July 2026 when VanEck's HODL waiver expired, leaving smaller funds like Franklin Templeton's EZBC or Bitwise's BITB struggling to maintain market share. The Bitcoin ETF market is a winner-take-most business where scale and distribution drive investor decisions.

BlackRock manages over $10 trillion in assets globally, making IBIT an attractive choice for institutional investors. However, Fidelity FBTC offers a way to diversify custody risk as it uses Fidelity Digital Assets for in-house self-custody.