Morgan Stanley Bitcoin Trust (MSBT) recorded a $66.8 million decrease in net assets from operations during its first 85 days, even as the exchange-traded fund brought in $371.1 million of gross share contributions against $5.26 million of redemption distributions.
The trust’s first quarterly filing shows creations dominated redemptions while Bitcoin fell. Redemption distributions equaled 1.42% of gross contributions from April 7 through June 30.
Unrealized Bitcoin depreciation accounted for $66.17 million of the operating-period decrease, nearly 99%. The balance consisted of $618,611 in realized Bitcoin losses and $72,288 in sponsor fees, distinguishing the $66.86 million accounting result from an ETF outflow measure.
Morgan Stanley’s Bitcoin ETF net asset value per share fell 14.01%, from $19.70 to $16.94, while its disclosed CoinDesk Bitcoin benchmark declined 13.98% over the same period. At quarter-end, the trust held 5,059.3077 BTC with a $365.18 million cost basis and a fair value of $299 million, based on a Bitcoin price of $59,101.49.
Creations dominated after the zero-redemption month
MSBT issued 17.9 million shares and redeemed 250,000 during the reporting period, equal to 1,790 creation baskets and 25 redemption baskets. It ended June with 17.65 million shares outstanding and added a net $365.84 million through capital transactions.
MSBT completed its first trading month without daily redemptions. The 25 later redemption baskets ended that streak, although their value remained small relative to gross creations.
The filing’s GAAP figures and daily ETF flow tables use different measurement bases. MSBT’s $371.1 million contribution combined $200.3 million in cash proceeds with $170.8 million in Bitcoin received for share issuance.
Trust-level creations and redemptions occur through Authorized Participants in 10,000-share baskets at net asset value, according to the fund’s prospectus, while ordinary investors normally trade MSBT shares on NYSE Arca.
Those basket transactions do not identify the end sellers or their motivation, so the filing cannot establish whether retail activity drove the redemptions.
The trust had 21.74 million shares outstanding on July 31, up 4.09 million, or 23.17%, from June 30. The increase confirms net creation activity continued after the reporting period, though the filing does not identify which investors or distribution channels produced it.
