 ▲ BlackRock, Morgan Stanley, Bitcoin (BTC) / AI-generated image |
Wall Street’s vast capital has begun a silent war to seize control of Bitcoin’s base layer, reshaping a market that was once a symbol of decentralization.
Guy Turner, host of the cryptocurrency-focused YouTube channel Coin Bureau, said in a video released on March 12 (local time) that Morgan Stanley has challenged BlackRock’s dominance in the spot Bitcoin ETF market and is seeking to monopolize market liquidity. Turner assessed that Morgan Stanley is moving beyond merely pursuing fee revenue and is taking aggressive steps to absorb the entire Bitcoin infrastructure.
On March 4, Morgan Stanley officially entered the market by submitting an amended application for a spot Bitcoin ETF to the U.S. Securities and Exchange Commission (SEC). BlackRock’s IBIT currently manages more than $52.7 billion in assets, accounting for 60% of the U.S. spot ETF market share. Morgan Stanley has adopted a dual-custody model, entrusting on-chain security to Coinbase and cash management to BNY Mellon, but internally it is pursuing a much larger strategy.
On February 18, Morgan Stanley applied to the Office of the Comptroller of the Currency (OCC) for approval to establish a national trust bank, launching efforts to build its own custodian, Morgan Stanley Digital Trust. Amy Oldenberg, head of digital asset strategy at Morgan Stanley, stated that the firm aims to move away from relying on external technology and instead secure its own custody systems and trading infrastructure. The goal is to reduce dependence on Coinbase, which controls 80% of the custody market, and to hold Bitcoin directly in its own vaults.
A supply shock appears inevitable. Of the approximately 19.97 million BTC mined to date, only about 3.9 million BTC are actually available for trading after accounting for lost coins and illiquid addresses. Just as gold prices surged 287% over the eight years following the launch of gold ETFs in 2004, competition between BlackRock and Morgan Stanley could trigger a severe supply-demand imbalance. Analysts forecast that with Morgan Stanley’s entry, total U.S. spot Bitcoin ETF assets could reach $220 billion by the end of 2026.
While Wall Street-led financialization of Bitcoin is a positive driver for price appreciation, it poses a threat to its core value of decentralization. As institutions establish their own vaults to store Bitcoin, most future liquidity could fall under Wall Street’s control. As digital assets risk becoming reserve assets for major banks, a structure is solidifying in which individuals no longer hold their own private keys. With institutional monopolization accelerating, physical custody of Bitcoin is increasingly concentrating in the hands of a few large capital players.
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