Morgan Stanley Bitcoin Trust drew $371.1M; $66.8M decline

From April 7 through June 30, Morgan Stanley Bitcoin Trust collected $371.1 million in gross share contributions and distributed $5.26 million in redemptions. Redemption distributions equaled 1.42% of gross contributions during the reporting period.

The trust recorded a $66.8 million decrease in net assets from operations. Unrealized depreciation in the trust’s Bitcoin holdings accounted for $66.17 million of that decline. The remaining operating-period change included $618,611 in realized Bitcoin losses and $72,288 in sponsor fees.

MSBT issued 17.9 million shares and redeemed 250,000 shares during the period, recorded as 1,790 creation baskets and 25 redemption baskets. The trust ended June with 17.65 million shares outstanding and net capital inflows of $365.84 million from creation and redemption activity. The filing notes the trust completed its first trading month without daily redemptions; the later 25 redemption baskets were small relative to gross creations.

By July 31, shares outstanding had risen to 21.74 million, an increase of 4.09 million shares, or 23.17%, from June 30.

At quarter-end the trust held 5,059.3077 BTC with a cost basis of $365.18 million and a fair value of $299 million, calculated using a Bitcoin price of $59,101.49. Net asset value per share fell 14.01%, from $19.70 to $16.94, while the trust’s disclosed Bitcoin benchmark declined 13.98% over the same period.

The filing notes differences in measurement bases between GAAP figures and daily ETF flow tables. Gross contributions combined $200.3 million in cash with $170.8 million in Bitcoin received in-kind for share issuance. Creation and redemption transactions occur through Authorized Participants in 10,000-share baskets at net asset value, while ordinary investors trade MSBT shares on NYSE Arca. Prospectus-level basket records do not identify ultimate sellers or their motivations, so the filing does not determine whether retail trading or other channels produced the redemption baskets.

Nearly all of the operating-period decline was recorded as unrealized depreciation of the trust’s Bitcoin holdings rather than realized losses or fees.