The bear market has arrived, and cryptocurrency ETF issuers are also getting involved

Author: Chloe, ChainCatcher

On April 8, 2026, Morgan Stanley's spot Bitcoin ETF (ticker: MSBT) officially began trading on the NYSE Arca, becoming the first spot Bitcoin ETF issued directly by a major bank in the United States, with an annual fee rate of 0.14%, setting a new record for the lowest fee in the market.

This move is not just a simple product launch; it symbolizes a restructuring of liquidity in the crypto market. As giants like BlackRock and Fidelity collaborate to capture a multi-billion dollar ETF market, the power of Wall Street's channels and regulatory endorsements fully intervene, the real survival pressure does not lie with Bitcoin holders, but with the native crypto exchanges that are losing liquidity pricing power.

What is the competitive logic behind these five giants? Is Morgan Stanley's low-price strategy enough to change the overall landscape? And how can perpetual contracts become the last moat for native crypto exchanges in this war of attrition?

Multi-Billion Dollar Market: Cryptocurrency ETFs Are Moving Towards High Concentration

As of 2026, approximately 25 asset management companies in the United States are directly involved in cryptocurrency products (including ETFs, trusts, and funds), resulting in extremely high market concentration. The total assets under management (AUM) of the five major crypto asset management giants have surpassed $100 billion, with the size of spot Bitcoin ETFs exceeding $90 billion. Compared to the starting phase of $56 billion in 2024, this represents a growth of 1.6 times in just two years.

In the competitive landscape, BlackRock's iShares Bitcoin Trust (IBIT) demonstrates absolute dominance, leading the pack with $54.9 billion AUM, attracting a net inflow of $8.4 billion in a single quarter, capturing 45% of the total market inflow; FBTC (Fidelity) ranks second with $12.3 billion, and GBTC (Grayscale) comes in third with $10.6 billion.

From the data above, it is clear that when institutional capital decides to allocate Bitcoin exposure, BlackRock is almost the only choice. This is not merely the result of a fee war, but rather the Matthew effect resulting from the combination of brand credibility, deep liquidity, and strong distribution channels. As the world's largest ETF issuer, BlackRock has created an institutional-level average daily trading volume and extremely narrow bid-ask spreads for IBIT, making it difficult for latecomers to surpass this moat built on liquidity and trust, even if they make concessions on fees.

Five Giants, Five Strategic Logics

On the surface, the five asset management companies are competing for the same pie, but a closer examination of their competitive strategies reveals distinctly different battlefield divisions.

BlackRock's logic is the most straightforward: scale is the moat. With $14 trillion in global AUM and deep distribution agreements with major brokerage platforms, IBIT naturally occupies the "preferred list" of institutional investors. Before the fee war began, BlackRock secured the largest liquidity pool in the market, giving it an exclusive advantage that no native crypto competitor can replicate.

Fidelity takes a different route: institutional self-custody. Although its fee rate of 0.25% is on par with IBIT, FBTC is directly managed by Fidelity Digital Assets, eliminating reliance on third-party crypto exchanges compared to the Coinbase-led model. This "full-stack" architecture provides strong trust for insurance companies or pension funds that place a high value on compliance and asset security. Additionally, to further enhance security, Fidelity introduced BitGo as a co-custodian in February 2026, implementing multiple backups.

Grayscale's advantage lies in its historical depth. Since launching the Bitcoin Trust in 2013, Grayscale has accumulated a watchlist of over 36 crypto assets and an institutional relationship network. Although GBTC faced significant capital outflows during the early stages of ETF conversion, with a net outflow of $1.2 billion in the first quarter of 2026, this has narrowed significantly compared to the peak in 2024. Grayscale's market value is based on breadth rather than depth: it is currently the only traditional asset management company that can offer diversified crypto products such as Ethereum, Solana, and DeFi themes.

Bitwise focuses on differentiated advantages, with its Solana staking ETF (BSOL) accumulating $500 million in AUM just 18 days after launch, using a staking yield mechanism to precisely target institutional clients seeking alternative exposure beyond Bitcoin. This is not a simple asset replication but rather packaging the on-chain native yield logic into a compliant, distributable traditional financial product. To date, Bitwise controls about 70% of the total AUM of Solana ETFs, holding $545 million of the total $775 million.

Galaxy Digital has chosen to collaborate with State Street to launch actively managed ETFs, providing comprehensive institutional services beyond passive index products, targeting institutions that require portfolio advisory and risk hedging design, rather than just exposure needs.

In summary, the dimensions of overall market competition have extended from fees to asset breadth, custody asset security, and investment target yields, indicating a multi-dimensional competitive landscape.

Traditional Large Bank Morgan Stanley Enters Bitcoin ETF

On April 8, 2026, Morgan Stanley's Bitcoin Trust (MSBT) began trading on NYSE Arca, with an annual fee rate of only 0.14%, becoming the first large bank in the U.S. to issue a spot Bitcoin ETF under its own name, and currently the lowest fee Bitcoin ETF product in the market.

It is worth mentioning that the 0.14% fee is lower than Grayscale Bitcoin Mini Trust's 0.15% and significantly lower than BlackRock's IBIT at 0.25%, making it the lowest fee spot Bitcoin ETF in the U.S. For institutional investors holding long positions, this 11 basis point difference can translate into annual cost savings of millions to hundreds of millions of dollars due to scale effects.

However, fees are just the surface; Morgan Stanley's real core weapon is its asymmetric advantage in distribution networks, with approximately 16,000 financial advisors managing over $6.2 trillion in client assets. When these advisors actively recommend MSBT, the competitive logic is entirely different from other ETFs; it does not compete alongside dozens of products on brokerage platforms but directly reaches clients through high-sticky trust relationships.

Some analysts have pointed out that if clients of Morgan Stanley's wealth management platform allocate just 2% to Bitcoin, it could generate approximately $160 billion in potential demand, a figure that exceeds the total AUM of the current spot Bitcoin ETF market.

On the other hand, MSBT is not acting in isolation but as part of a coordinated strategy. Morgan Stanley plans to collaborate with E*Trade and Zerohash to launch retail direct trading services for Bitcoin, Ethereum, and Solana in the first half of 2026; coupled with its submitted application for a national trust bank subsidiary (Morgan Stanley Digital Trust), covering the entire chain of custody, trading, and staking, this comprehensive layout of crypto asset financial infrastructure could pose a significant threat to the currently largest player, BlackRock.

The Dilemma of Exchanges and the Last Differentiated Weapon

Moreover, Wall Street's entry poses "customer dilution" pressure on native crypto exchanges, which is not just an issue of a single competitor but a migration of the entire institutional entry.

The rise of spot Bitcoin ETFs means that institutional investors no longer need to open exchange accounts, manage private keys, or go through complex KYC processes; they simply need to click buy on existing traditional brokerage platforms. The fiat channels of Coinbase, Kraken, and Binance were once the only bridges for institutions to access crypto assets, but now this bridge has been completely bypassed by the ETF channels of BlackRock and Fidelity.

In this dilemma of stock competition, the remaining moat for native exchanges that cannot be easily replicated is perpetual contracts, a unique financial innovation in the crypto market. They have no expiration date, maintain anchoring to spot prices through funding rate mechanisms, allow for high leverage bidirectional operations, and the market never closes 24/7.

According to reports from Coinperps, derivatives dominate the entire structure of the crypto market, with perpetual contracts and futures accounting for as much as 77% of the total trading volume of $79 trillion over the past year, indicating that the contribution of spot business to native exchanges is shrinking.

The core advantage of perpetual contracts is the ability to leverage small amounts for large gains; for skilled traders, this is a trading density that no traditional ETF can provide. Institutions like BlackRock offer "the security of holding Bitcoin," while the perpetual contracts of native crypto exchanges provide active traders with leverage tools to "profit from cryptocurrency volatility." These are two distinctly different demand markets, and the latter remains the absolute stronghold of native exchanges.

An Ongoing Structural Restructuring

The essence of this competition is a slow but irreversible boundary redefinition between traditional financial order and the native crypto ecosystem.

Wall Street brings credit endorsement, distribution channels, and the scale effect of institutional funds, but it cannot reach leveraged traders, on-chain users, and those who view crypto trading as a lifestyle. The survival of native exchanges depends on whether they can deepen the ecological density of perpetual contracts, on-chain derivatives, and next-generation financial infrastructure beyond the lost spot share.

Jed Finn, head of Morgan Stanley's wealth management division, has candidly stated that the crypto direct trading launched by E*Trade is "just the tip of the iceberg," with subsequent plans covering custody, wallets, and tokenized assets. This also indicates that when even the most conservative traditional financial institutions begin to use phrases like "the tip of the iceberg," it signifies not just the ambition of a single bank, but that the ceiling of the entire track is being redefined.

The listing of MSBT today is the latest symbolic node in this restructuring, as the influx of institutions is accelerating the embrace of cryptocurrencies by traditional finance, while also diluting the liquidity of the native market. The real question is not about a winner-takes-all scenario, but how the future landscape of the crypto market will change when the boundaries disappear.