Morgan Stanley Bitcoin Trust

Morgan Stanley Bitcoin Trust operates as a passive grantor trust holding only bitcoin to mirror the CoinDesk Bitcoin Benchmark 4PM NY Settlement Rate, offering investors regulated exchange-traded exposure without direct custody hassles. Formed December 16, 2025, the Trust delegates operations to Morgan Stanley Investment Management Inc. under Cayman Trustee oversight via Appleby Agreements, with BNY and Coinbase Custody securing assets primarily in cold storage. Shares trade on NYSE Arca under 'MSBT' in continuous offering via Authorized Participants creating/redeeming 10,000-Share Baskets in cash or in-kind, minimizing premium/discount risk through arbitrage though cash settlements introduce execution slippage borne by APs.

Financially, the 0.14% annual Delegated Sponsor Fee covers ordinary expenses, with bitcoin sold monthly to fund it; extraordinary costs like litigation fall to Trust assets. No revenue beyond bitcoin holdings; NAV computed daily via Benchmark aggregating major spot exchanges, with GAAP Principal Market NAV differing slightly. Seed capital of $100 bought 2 Shares at $50; initial listing expects 50,000 seed Shares for $1M proceeds used to acquire bitcoin.

Key differentiators include Morgan Stanley branding, dual regulated custodians (NYDFS/Banking), and Prime Broker facilitation via Coinbase for efficient cash handling. Risks center on bitcoin volatility (historical range $10k-$122k), custodian failure (shared insurance insufficient), regulatory shifts potentially classifying Trust as investment company/commodity pool, and AP concentration impairing liquidity. No forks/airdrop participation preserves grantor trust status. Management leverages Morgan Stanley's $11.9B AUM ETF experience despite crypto novelty. High materiality as spot bitcoin ETF debut from major firm amid maturing crypto infrastructure.