Bitcoin Price Prediction Ahead of Morgan Stanley BTC ETF Launch
Key Insights
- Bitcoin price wavered on Tuesday as investors waited for the upcoming Morgan Stanley BTC ETF launch.
- The fund will be launched on Wednesday with an expense ratio of 0.14%.
- BTC price has formed a bearish flag pattern, pointing to more downside.
Bitcoin price stayed on edge Tuesday as investors focused on the Iran war. President Donald Trump warned of severe bombing in Iran. BTC was trading at $68,250 as traders waited for the upcoming Morgan Stanley Bitcoin ETF launch.
Morgan Stanley to Launch its Bitcoin ETF This Week
Morgan Stanley will be in the spotlight this week as it launches its spot Bitcoin ETF, whose ticker is MSBT.
The company aims to attract assets from both its existing clients and other American investors. Its main advantage will be its cost, which will make it the cheapest Bitcoin ETF in the industry with an expense ratio of 0.14%.
MSTB will be cheaper than Grayscale’s BTC ETF, which has an expense ratio of 0.15%. Most importantly, it will be a bargain compared to the iShares Bitcoin ETF (IBIT), which costs 0.25% a year.
Morgan Stanley hopes strong name recognition will attract investors. It also banks on rising demand for low‑cost ETFs. A good example of this is in the funds tracking the S&P 500 Index.
Data shows the Vanguard S&P 500 Index (VOO), with a 0.03% annual cost, gained $24 billion in assets this year. Meanwhile, the SPDR S&P 500 Index (SPY) lost $33 billion in assets. This is a sign that investors are rotating from SPY to VOO to save 0.06% in annual fees.
Still, Morgan Stanley ETF may face major challenges in attracting assets. The main challenge is that it is in a highly competitive industry. There, other top companies like Fidelity, Franklin Templeton, WisdomTree, and Invesco have launched products.
BlackRock’s IBIT maintains a bigger market share with over $53 billion in assets despite its higher network fees.
Additionally, the fund’s launch comes at a time when demand for Bitcoin and other cryptocurrencies is still weak. Spot Bitcoin ETFs have shed over $5 billion in assets since October last year.
BlackRock to Launch a Covered Call Bitcoin ETF Soon
BlackRock, with over $14 trillion in assets, plans to launch another Bitcoin ETF. This move stands out as a key catalyst for Bitcoin’s price momentum. This new fund will be different in that it will enable investors to earn a monthly return from their Bitcoin holdings.
The fund’s approach is fairly simple. BlackRock will allocate some of its funds either to Bitcoin or IBIT. It will use a portion of its funds to write calls on the same assets. This generates a premium, which it then distributes to investors as dividends.
The fund’s goal is to generate a return when the Bitcoin price rises and a monthly dividend. This dividend normally rises in periods of high volatility, when the options premiums widen.
However, historically, covered call ETFs tend to underperform the underlying assets in terms of the total return.
Looking ahead, the other main catalyst for the Bitcoin price is the ongoing Iran-US war. This may escalate later on Tuesday if President Trump decides to bomb Iran’s critical infrastructure. Such a move will lead to higher crude oil prices and inflation, which will lead to lower Bitcoin prices.
Bitcoin Price Technical Analysis
The weekly chart shows that the BTC price has come under pressure in the past few months. This chart suggests that it may continue falling as it has formed a bearish flag pattern. It has already completed the formation of the flagpole section and is now on the flag section.
The coin has also plunged below the 50% Fibonacci Retracement level and the 50-week Exponential Moving Average (EMA).
Bitcoin price chart | Source: TradingView
The coin will likely face a strong bearish breakdown soon. The next key targets are $60,000 and then $50,000.
The post Bitcoin Price Prediction Ahead of Morgan Stanley BTC ETF Launch appeared first on The Market Periodical.
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