Morgan Stanley marked a significant achievement with the launch of its spotBitcoinETF, boasting $9.3 trillion in client assets on Wednesday. Yet, the financial giant is already considering future steps in the crypto arena.
Despite filing applications for exchange-traded funds tracking Ethereum and Solana last January, the firm’s ambitions extend far beyond these cryptocurrencies. Amy Oldenburg, Morgan Stanley’s head of digital-asset strategy, told Decrypt that this move only begins the journey. “We’re not going to stop at just Bitcoin,” she remarked, highlighting the $46 million net inflows since the ETF’s debut, as reported by Farside Investors.
Morgan Stanley made history last year by becoming the first major wirehouse allowing its over 15,000 wealth advisors to recommend third-party spot Bitcoin ETFs from asset managers like Fidelity and BlackRock. Oldenburg suggested that the firm may follow in these competitors’ footsteps with future offerings.
A tokenized money-market fund is seen as a viable next step for Morgan Stanley’s product development, according to Oldenburg, who emphasized the potential across various asset classes for digitizing real-world assets. Franklin Templeton initiated this trend with yield-bearing tokens backed by U.S. Treasuries in 2021. However, BlackRock’s BUIDL has since taken precedence, amassing $2.3 billion per RWA.xyz data, while Fidelity’s Digital Interest Token holds approximately $172 million.
Parametric, a subsidiary of Morgan Stanley, offers clients rules-based investment strategies such as tax-loss harvesting. Oldenburg noted that integrating digital assets to mitigate capital gains taxes is another avenue worth exploring.
The bank signaled further expansion last year by partnering with E*TRADE and Zerohash for crypto trading capabilities. In February, Oldenburg mentioned the exploration of Bitcoin-based yield and lending services.
While Morgan Stanley’s Bitcoin Trust might not surpass BlackRock’s $53 billion spot Bitcoin ETF, Eric Balchunas from Bloomberg suggests it will challenge this industry leader. He highlighted the ETF’s competitive 0.14% fee as a strategic advantage in an intensely competitive field.
Oldenburg emphasized that Morgan Stanley isn’t new to fee compression strategies. As the ETF matures, she anticipates it serving as a commercial springboard for innovative products. “We had the opportunity to really focus on how efficiently we can deliver that product from a fee perspective,” she stated, indicating this approach is not solely about profit but fostering further development in crypto offerings.