Not Just Financial Products: The Triple Considerations of Traditional Financial Institutions When Launching Bitcoin ETFs

Morgan Stanley Launches Bitcoin ETF: Looks Like a Routine Product News, but Jeff Park, a Bitwise Advisor, Reveals Deeper Strategic Logic Behind It. This Is Not Just About the Product Itself, But Also About How Institutions Use Proprietary Brand Products to Control Customer Relationships and Maintain Distribution Rights.

Why Launch It Now? Three Institutional Considerations

Market Size Demonstrates Business Feasibility

The first Bitcoin spot ETFs were approved two years ago, with products from Bitwise, Fidelity, Grayscale, and others already dominating the market liquidity. Against this backdrop, Morgan Stanley’s decision to launch its own brand product indicates a strategic choice.

According to Jeff Park’s analysis, Morgan Stanley, through internal wealth management channels, believes that the market size and new client demand still make this commercially viable. In other words, traditional financial giants see a big enough cake and don’t want to be just intermediaries. Related information shows that Bank of America has approved recommending Bitcoin ETFs to wealth advisors, suggesting a Bitcoin allocation of 1% to 4% in client portfolios. This clearly indicates that institutional-level Bitcoin demand has shifted from niche to mainstream.

Strategic Value of Brand and Customer Relationships

This is the core point Jeff Park emphasizes: for asset management institutions, Bitcoin ETFs are not just financial products but also carry symbolic significance at the brand and social levels.

For traditional financial giants like Morgan Stanley, launching their own Bitcoin ETF is akin to declaring an attitude to the market — we not only recognize Bitcoin but also value this asset class enough to use our own brand to endorse it. This is especially effective for reaching ultra-high-net-worth individual investors and other specific client groups. Compared to recommending third-party products, proprietary brand products clearly better demonstrate the institution’s professionalism and foresight.

Defensive Layout for Distribution Rights and Fee Retention

This is the most pragmatic consideration: controlling customer relationships and retaining distribution revenue.

Jeff Park points out that launching proprietary products is a defensive move to safeguard platform distribution rights and fee retention. In other words, if Morgan Stanley only recommends products from Bitwise or Fidelity, the distribution profits would go to third parties. But if they launch their own product, all transaction fees, management fees, and other charges stay within Morgan Stanley’s ecosystem. This is a significant business opportunity — according to related reports, XRP ETF’s weekly net inflow has reached $43 million, and with an annualized management fee of 0.2%-0.5%, it’s a substantial income.

Institutional Competition Is Heating Up

Looking at Bitwise’s recent moves helps understand how hot this market is. Related reports show:

• Bitwise’s XRP ETF has accumulated a total net inflow of $265 million
• Bitwise’s SOL ETF leads the market with an asset management scale of $681 million
• Bitwise just received approval for a LINK spot ETF
• Bitwise has also applied for 11 other altcoin strategy ETFs including AAVE and ZEC

Meanwhile, traditional financial institutions like Bank of America, Morgan Stanley, and Wells Fargo are accelerating their布局. This is not just a test run by one or two firms but a Wall Street-wide scramble for distribution rights in this emerging asset class.

Future Highlights

From Morgan Stanley’s move, I believe this will set a demonstration effect. More traditional financial institutions may follow suit, launching their own branded Bitcoin or other crypto asset ETFs. This means:

• Competition among ETF products will intensify, but it will also lead to a more regulated and mature market
• Capital flows may become more dispersed, but the overall inflow trend is unlikely to change
• Smaller or later-stage ETF products will face squeezed survival space, and industry consolidation may occur

Summary

Morgan Stanley’s decision to launch a Bitcoin ETF reflects that traditional financial institutions’ attitude toward crypto assets has shifted from observation to active participation. This is not just a product-level competition but also a strategic layout involving customer relationships, brand value, and fee retention.

A key point is that this indicates Bitcoin is no longer a niche asset but has become a market that mainstream financial institutions must engage in. The subsequent focus will be on how this institutional competition shapes the crypto asset market ecosystem — whether it will bring more liquidity and regulation or further strengthen the dominance of large institutions.