Morgan Stanley has chosen Coinbase and Bank of New York Mellon to safeguard the Bitcoin backing its proposed Bitcoin Trust ETF.
The decision was disclosed in a filing submitted to the U.S. SEC, which details how the Wall Street bank intends to manage custody of the digital assets supporting the fund.
Key Points
- Morgan Stanley named BNY Mellon and Coinbase as custodians for the Bitcoin backing its proposed Bitcoin Trust ETF.
- The custody arrangement was disclosed in an SEC filing detailing how the ETF’s digital assets will be secured and managed.
- Most of the fund’s Bitcoin will be held in offline cold storage, with limited use of hot wallets for ETF share creation and redemption.
- The proposed Bitcoin ETF is part of Morgan Stanley’s broader plan to launch crypto investment products, including a separate ETF tracking Solana.
Custody Structure Detailed in SEC Filing
According to the filing, Coinbase and BNY will serve as the official custodians of the ETF’s Bitcoin holdings. In this capacity, the two institutions will be responsible for securing the digital assets and facilitating trade execution when required.
Most of the Bitcoin will be stored in cold storage, where private keys are kept offline. This approach significantly reduces exposure to cyber threats and is widely used to safeguard large digital-asset reserves.
However, the filing notes that a portion of the holdings may occasionally be transferred to internet-connected hot wallets. These temporary transfers are to support the creation and redemption of ETF shares, processes that require readily accessible liquidity. Consequently, limited short-term online storage may be necessary at times.
Additionally, the document clarifies the regulatory status of the custodians. BNY operates as a bank chartered in New York State. Meanwhile, Coinbase Custody functions as a limited liability trust company regulated in the same jurisdiction. According to the filing, both firms provide digital-asset custody and trade-execution services.
Morgan Stanley’s Expanding Crypto Strategy
More broadly, the custody arrangement reflects Morgan Stanley’s effort to expand its presence in digital assets. In January, the bank filed applications with the SEC to launch two cryptocurrency exchange-traded funds.
One of the proposed funds would track Bitcoin, while the other would focus on Solana. Both vehicles are structured as passive investment products designed to hold the underlying cryptocurrencies and mirror their market performance.
This initiative also aligns with a broader trend of institutional engagement in the crypto market. Large financial firms have increasingly explored digital-asset products, even during periods of market weakness.
For context, Bitcoin continues to trade far below its historical peak, down approximately 42% from its highest value of $126,000.
Nevertheless, recent ETF activity suggests investor demand may be returning. For instance, BlackRock’s spot Bitcoin ETF recorded $322 million in inflows on Tuesday. Those gains helped offset outflows from competing products by Fidelity Investments and Grayscale Investments.
Consequently, total inflows for the week reached approximately $683.3 million, down from $787.3 million the week prior. Notably, that week had marked a brief turnaround, producing the first positive inflows after five consecutive weeks of withdrawals totaling nearly $4 billion.
Strategic Impact for Morgan Stanley
Industry observers say Morgan Stanley’s ETF could strengthen the bank’s position in the crypto sector. Jeff Park, an adviser at asset management firm Bitwise Asset Management, said the launch would help the bank establish a stronger foothold in digital assets.
Park noted that the fund does not need to dominate the market to be valuable for the company. Leading products such as BlackRock’s iShares Bitcoin Trust already command significant market share.
Even so, introducing a Bitcoin ETF could deliver several strategic benefits. Beyond attracting investor interest, it may help Morgan Stanley recruit experienced professionals from the crypto industry and support broader initiatives tied to blockchain technology.
Finally, Park added that institutional developments of this kind are generally positive for the crypto ecosystem, as they signal that interest in digital assets extends beyond the current investor base.
Morgan Stanley executives have echoed this perspective. Speaking to analysts during the Q4 2025 earnings call, CEO Ted Pick remarked that the bank is well-positioned to capitalize on developments in cryptocurrency and tokenized assets. According to Pick, the bank sees considerable long-term potential in the evolving digital finance landscape.
DisClamier: This content is informational and should not be considered financial advice. The views expressed in this article may include the author's personal opinions and do not reflect The Crypto Basic opinion. Readers are encouraged to do thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.
