Wall Street Giant Morgan Stanley Holds $270 Million in Bitcoin ETFs

Multinational investment bank and financial services company Morgan Stanley disclosed U.S. spot bitcoin exchange-traded fund (ETF) holdings worth over $270 million as of March 31 in a quarterly 13F filing with the Securities and Exchange Commission (SEC) on Wednesday.

Breakdown of Morgan Stanley’s Bitcoin ETF Investments

Morgan Stanley reported holding $269.9 million worth of Grayscale’s converted spot bitcoin ETF (GBTC), making it the third-largest holder of GBTC shares behind Susquehanna, with $1.1 billion, and Horizon Kinetics, with $946 million, according to Fintel data. Additionally, the bank revealed a smaller $2.3 million allocation to Ark Invest’s spot bitcoin ETF (ARKB), placing it among the top 20 ARKB holders, per Fintel.

Understanding 13F Filings

13F filings are quarterly reports filed with the SEC by institutional investment managers who manage at least $100 million in equity assets. These filings provide a snapshot of the manager's stock holdings at the end of each quarter. However, 13F reports only require the disclosure of long positions in U.S. equities and options on equities, providing only a partial view of an investment manager's overall portfolio strategy.

Morgan Stanley’s Perspective on Bitcoin ETFs

In a January note to investors, Morgan Stanley’s Head of Digital Asset Markets, Andrew Peel, described the U.S. spot bitcoin ETF launch as a "potential paradigm shift in the global perception and use of digital assets." In February, a Morgan Stanley fund indicated in an SEC filing that it might gain exposure to spot bitcoin ETFs. Last month, the firm reportedly established risk management requirements to potentially allow its 15,000 brokers to recommend these ETFs to clients.

Institutional Ownership of Spot Bitcoin ETFs Grows

Morgan Stanley is among hundreds of institutional investors declaring U.S. spot bitcoin ETFs in their first-quarter 13F filings over the past few weeks. Yesterday, Millennium Management became the largest known holder in this category, with a combined $1.94 billion in shares as of March 31, spread across five funds: ARK Invest’s ARKB, Bitwise’s BITB, Grayscale’s GBTC, BlackRock’s IBIT, and Fidelity’s FBTC. However, these holdings comprised just 3% of the hedge fund's $64 billion in assets under management, according to its quarterly 13F filing with the SEC. Bloomberg ETF analyst Eric Balchunas noted on X that Millennium’s position in bitcoin ETFs significantly surpasses the average for new ETFs, with a substantial portion held by investment advisors and hedge funds.

Other Major Holders of Bitcoin ETFs

Last week, Bracebridge Capital emerged as a top holder of Ark Invest’s ARKB and BlackRock’s IBIT spot bitcoin ETFs, also holding a significant allocation of Grayscale’s GBTC. Bracebridge’s combined spot bitcoin ETF holdings were valued at $434 million as of March 31. Additionally, the State of Wisconsin Investment Board disclosed a $163 million stake in BlackRock and Grayscale’s spot bitcoin ETFs on Tuesday.

The Future of Bitcoin ETF Allocations

Bitwise CIO Matt Hougan commented earlier this week that the spot bitcoin ETF allocations revealed in recent 13F filings with the SEC are just a “down payment.” Hougan projected that by the May 15 filing deadline, the number of professional firms reporting bitcoin ETF ownership could exceed 700, with total assets under management (AUM) approaching $5 billion. He emphasized that the scale of ownership for these new ETFs is “off the charts.”

Recent Market Activity

The U.S. spot bitcoin ETFs witnessed $303 million in net inflows on Wednesday, led by Fidelity’s FBTC with $131.3 million in net inflows. Ark Invest’s ARKB and Grayscale’s GBTC generated $38.6 million and $27 million in net inflows, respectively. This surge in investment coincided with an 8% rise in bitcoin’s price, which closed the day back above $66,000, according to The Block’s price page.