Morgan Stanley Bitcoin ETF attracts 371.1 million contributions, net assets drop 66.8 million

Morgan Stanley Bitcoin Trust (MSBT) reported a 66.8 million decrease in net assets from operations in its first 85 days, despite gross share contributions of 371.1 million and redemption distributions of 5.26 million. The trust's quarterly filing indicates that creations outpaced redemptions, with redemption distributions at 1.42% of gross contributions from April 7 to June 30. Unrealized Bitcoin depreciation accounted for 66.17 million of the decrease, while realized losses totaled 618,611 and sponsor fees were 72,288. The net asset value per share fell 14.01% from 19.70 to 16.94, with the CoinDesk Bitcoin benchmark declining 13.98% in the same period. At the end of June, the trust held 5,059.3077 BTC, with a cost basis of 365.18 million and a fair value of 299 million based on a Bitcoin price of 59,101.49. During the reporting period, MSBT issued 17.9 million shares and redeemed 250,000, resulting in 17.65 million shares outstanding at month-end. The trust experienced its first trading month without daily redemptions, although 25 redemption baskets later occurred, remaining small compared to gross creations. The filing's GAAP figures and daily ETF flow tables used different measurement bases, with the 371.1 million contributions comprising 200.3 million in cash and 170.8 million in Bitcoin. As of July 31, the trust had 21.74 million shares outstanding, reflecting a 23.17% increase from June 30.

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