Morgan Stanley outlines custody structure for proposed Bitcoin ETF

CoinDesk

by James Van Straten

March 4, 2026

AI-Generated Deep Dive Summary

Morgan Stanley has filed a prospectus with the Securities and Exchange Commission (SEC) outlining its proposed Bitcoin Trust, which will utilize Coinbase Custody and the Bank of New York Mellon (BNY Mellon) as key custodians. The trust aims to provide a secure structure for holding and managing bitcoin assets, aligning with institutional standards. BNY Mellon will serve multiple roles, including acting as the fund administrator, transfer agent, and cash custodian, while Coinbase Custody will handle the storage of digital assets in offline cold storage vaults to minimize hacking risks. The filing details a custody framework designed to mirror traditional financial systems, with bitcoin held primarily in secure, offline storage. While most assets remain in cold storage, a portion may temporarily move to trading wallets during ETF creation or redemption activities. The trust acknowledges that while insurance is in place for asset protection, it is shared across customers and may not cover all potential losses. Morgan Stanley’s proposed Bitcoin ETF will operate as a passive vehicle, directly holding bitcoin rather than using derivatives or leverage. This approach aims to track the price of bitcoin through its net asset value, which will be calculated using the CoinDesk Bitcoin Benchmark 4PM New York Settlement Rate—a reference price derived from major spot exchanges. The fund’s structure is intended to provide investors with direct exposure to bitcoin while maintaining operational rigor. This development matters significantly for crypto enthusiasts and institutional investors alike, as it underscores the growing adoption of digital assets within traditional financial systems. By leveraging established institutions like BNY Mellon and Coinbase Custody, Morgan Stanley is signaling a commitment to security and compliance in its Bitcoin ETF offering. This move could pave the way for broader institutional participation in the cryptocurrency market, further legitimizing bitcoin as an investment asset.

Verticals

cryptofinance

Originally published on CoinDesk on 3/4/2026