Morgan Stanley’s Bitcoin ETF Doubled Its Holdings in Q3 Without a Single Redemption

Morgan Stanley’s own spot Bitcoin fund had its busiest quarter yet. The Morgan Stanley Bitcoin Trust, which trades as MSBT, more than doubled its holdings in the three months to Sept. 30, ending the quarter with about 10,436 BTC.

Investors did not take any money out along the way. According to the trust’s quarterly report, filed with the SEC on Nov. 13, the fund issued 18.77 million new shares in the third quarter and redeemed none.

That is a notable result for a product that only started trading on April 7, 2026. It shows a major Wall Street bank’s clients steadily adding Bitcoin through a fund carrying their own firm’s name.

Holdings Climbed From 5,059 BTC to 10,436 BTC

At the end of June, the trust held about 5,059 BTC worth $299 million. By the end of September, it held about 10,436 BTC with a fair value of $873.5 million.

Net assets rose by about 192% over the quarter. Part of that came from Bitcoin’s price, which climbed about 42% from $59,101 to $83,699 between the two dates. Most of it came from new money.

Shares outstanding rose from 17.65 million to 36.42 million. The trust created those shares in 1,877 blocks of 10,000, known as baskets, bringing in about $410.9 million in the quarter.

Cash and In-Kind Creations Split the Inflows

The filing also shows how the new Bitcoin arrived. About 2,886 BTC, worth $224.9 million, was bought with cash from share creations. Another 2,493 BTC, worth $186 million, was delivered directly in exchange for new shares.

In-kind deliveries let large holders swap Bitcoin for fund shares without first selling it. That route has become common across U.S. spot Bitcoin funds and can make the products more efficient for big investors.

The only Bitcoin that left the trust in the quarter was about 1.95 BTC, sold to pay the sponsor fee. That amounted to roughly $133,000.

A 0.14% Fee and a Small Stake From the Sponsor

MSBT charges a single annual fee of 0.14% of net assets, accrued daily. The fee is paid to Morgan Stanley Investment Management, the bank’s wholly owned asset management arm, which acts as the trust’s delegated sponsor.

The sponsor also has some money in the fund. It contributed about $20 million for shares since launch and held roughly 1.6% of the trust’s shares at the end of September.

Since launch, the trust has taken in $782 million from share creations and paid out just $5.3 million for redemptions, all of it in the second quarter. Net capital raised stood at about $776.8 million on Sept. 30.

The trust’s net asset value per share rose 41.56% in the quarter, from $16.94 to $23.98. That tracked Bitcoin’s 41.62% move closely, with the small gap explained by fees.

How MSBT Compares With Other Funds

MSBT is still small next to the largest U.S. spot Bitcoin funds, but it is no longer a niche product. Other recent filings put its size in context. The VanEck Bitcoin ETF reported holding about 14,726 BTC on Sept. 30, while the CoinShares Bitcoin ETF reported about 5,706 BTC.

That means a six-month-old Morgan Stanley fund already holds more Bitcoin than some funds that launched in early 2024. Large trading firms have been active in this market too, as Jane Street’s latest filing showed when it nearly doubled its Bitcoin ETF book.

Leadership at the sponsor has also been refreshed. Craig Abruzzo became co-chief operating officer on Oct. 1, and Swapnil Parab became chief financial officer on Nov. 4 after Sally Diffley resigned, according to the trust’s recent 8-K filings.

Bitcoin Has Pulled Back Since the Quarter Closed

The numbers describe the position on Sept. 30, and the market has moved since then. Bitcoin traded near $65,300 on Nov. 15, according to CoinGecko data, about 22% below its quarter-end price.

At that price, 10,436 BTC would be worth about $682 million, though the trust’s current holdings may differ. U.S. spot Bitcoin funds have also seen a run of daily outflows in November, so the fourth quarter is unlikely to be as one-sided.

The filing gives the trust’s cost basis as about $775.9 million, or roughly $74,350 per Bitcoin. Some of the shareholders who bought in the third quarter are now sitting on paper losses.

Why This Matters for Bitcoin

We think the more lasting signal is the steady build-up of Bitcoin inside one of the world’s biggest wealth managers. A bank-branded fund that holds more than 10,000 BTC gives financial advisers a familiar way to offer the asset to clients.

That fits a wider trend of traditional banks moving into Bitcoin services, from custody launches like Deutsche Bank’s digital asset custody to in-house exchange-traded products. Each new channel widens Bitcoin’s reach.

The next quarterly report will show whether MSBT’s investors held firm through the autumn pullback. Readers can review the trust’s filings on the SEC’s EDGAR system.