Morgan Stanley Seeks Approval for Bitcoin ETF Launch

Morgan Stanley seeks SEC approval for a spot bitcoin ETF.

Investment bank Morgan Stanley, managing assets worth $1.9 trillion, has submitted an application to the SEC using Form S-1 to launch a spot bitcoin ETF.

The organization plans to engage the custodial services of Coinbase and BNY Mellon for cryptocurrency storage. These companies will also be responsible for handling transfers during the creation and redemption of ETF shares.

The storage model outlined in the document is geared towards institutional standards: the majority of bitcoins will be placed in cold wallets to minimize hacking risks.

Only during the creation or redemption of shares might the coins be temporarily moved to trading wallets.

The prospectus also notes that insurance for custodial services is provided, but it is distributed among clients and may not cover all potential losses.

BNY Mellon will additionally assume the roles of administrator of the Morgan Stanley Bitcoin Trust, transfer agent, and custodian of fiat funds. The bank will manage accounting, shareholder registry, and cash flows for ETF operations.

In early January, ProCap’s Chief Investment Officer Jeff Pack stated that Morgan Stanley would benefit from launching its own ETFs even if they yield low returns.

In his view, having such an instrument signals the asset manager’s “foresight and boldness.” This creates an image of a progressive company, which is particularly important in the competition for talented employees.

Morgan Stanley and the Crypto Market

The bank is steadily expanding its presence in the crypto market. In 2021, Morgan Stanley was the first among major U.S. financial institutions to offer its wealthy clients access to the NYDIG bitcoin fund.

In 2024, the company allowed advisors to recommend exchange-traded structures based on the first cryptocurrency from BlackRock and Fidelity. Later, the financial giant began preparations to launch digital asset trading on the E*Trade brokerage platform.

In October 2025, Morgan Stanley analysts recommended allocating up to 4% of portfolios to cryptocurrencies.