Who Will Hold the Bitcoin for Morgan Stanley’s ETF?

Morgan Stanley has named Bank of New York Mellon and Coinbase as custodians for its planned Bitcoin Trust exchange-traded fund, according to a filing with the U.S. Securities and Exchange Commission.

The filing shows that both firms will safeguard the Bitcoin held by the ETF. Most of the assets will be stored in cold wallets — offline systems used to secure private keys — while a smaller portion may be transferred to internet-connected hot wallets to support the fund’s creation and redemption process.

“The Bitcoin custodians are chartered as a New York state bank, in the case of BNY, and as a New York state limited liability trust company, in the case of Coinbase custodian,” the filing states. “The Bitcoin custodians provide custody and trade execution services for digital assets.”

Morgan Stanley submitted applications in January for spot ETFs tied to Bitcoin and Solana. Both funds are structured as passive vehicles designed to track the price of the underlying assets rather than actively trade them.

Why Is Morgan Stanley Launching a Bitcoin ETF Now?

The move comes nearly two years after the first spot Bitcoin ETFs began trading in the United States. Although the market experienced volatility, institutional interest in regulated crypto investment products remains active.

Bitcoin is still trading well below its previous peak, down roughly 42% from its all-time high of about $126,000. Even so, ETF flows have turned positive again in recent weeks after a prolonged period of withdrawals.

Data from recent trading sessions show renewed inflows across the category. BlackRock’s spot Bitcoin ETF recorded about $322 million in inflows in a single day, offsetting redemptions from competing funds including products from Fidelity and Grayscale.

Overall, the sector has recorded roughly $683.3 million in inflows this week, following $787.3 million in the previous week. That marked the first positive weekly flow after five consecutive weeks of withdrawals that totaled close to $4 billion.

What Does the ETF Mean for Morgan Stanley’s Crypto Strategy?

Industry observers say the ETF helps strengthen Morgan Stanley’s presence in digital assets even if the fund itself does not reach the scale of the largest products already in the market.

Jeff Park, an advisor to asset manager Bitwise, said the launch will reinforce the bank’s position in crypto infrastructure while opening doors for future business tied to tokenized assets.

During the company’s fourth-quarter earnings call earlier this year, chairman and CEO Ted Pick told analysts that Morgan Stanley is “well positioned now in the crypto and tokenized asset space,” adding that “there is a lot for us to do there.”

Beyond the ETF itself, Park noted that entering the market allows Morgan Stanley to attract talent with experience in blockchain markets and digital-asset trading. That could support future projects tied to tokenized real-world assets and other blockchain-based financial products.

What Could This Mean for the ETF Market?

Morgan Stanley’s entry into the spot Bitcoin ETF market arrives after the category already attracted billions of dollars in investor flows since its launch in the United States. Large asset managers such as BlackRock and Fidelity currently dominate the sector with funds that quickly built scale.

Even if Morgan Stanley’s fund does not rival the largest products in assets under management, its arrival broadens the range of financial institutions offering crypto exposure through regulated vehicles.

For the broader digital-asset market, each additional ETF sponsor expands distribution channels and investor access. Park said that trend suggests the potential market for crypto products may be larger than even many industry participants initially expected.

“It means the market is much bigger than even crypto professionals anticipated, especially to reach new customers,” he said.

Visa and Stripe-owned stablecoin platform Bridge announced an expansion of their stablecoin-linked card program from 18 countries to over 100 by end of 2026, enabling users to spend stablecoin balances at Visa’s 175 million merchant locations worldwide without converting to fiat first.

What the Program Does

A user holds stablecoins in a wallet. They use a Bridge-powered Visa card at any merchant. The transaction settles in real time, the stablecoin converts at the point of sale, and the merchant receives local currency as normal. No manual fund transfer needed.

That removes the friction that made crypto spending impractical. Previous programs required pre-loading a separate card balance. Bridge eliminates that step entirely.

On-chain settlement through Lead Bank runs backend reconciliation on blockchain rails rather than traditional card settlement. Faster for Bridge, cheaper for the ecosystem, invisible to the merchant and user. The settlement infrastructure change is actually more structurally significant than the user-facing feature.

Who Is Already Using It

Phantom and MetaMask are already using Bridge’s API to issue branded stablecoin debit cards. Phantom is the primary Solana wallet. MetaMask is the primary Ethereum wallet. Between them, they cover the two largest DeFi ecosystems by active user count.

When the wallets users already hold stablecoins in start issuing cards that let them spend directly, the conversion rate is much higher than any standalone app. The Bridge API model means any stablecoin wallet developer can integrate card functionality without building payment infrastructure from scratch.

The Geographic Logic

The program launched in Argentina, Colombia, and Mexico: high inflation, currency controls, limited dollar banking access. The 100-country expansion adds Europe, Asia-Pacific, Africa, and the Middle East, covering different user profiles from developed banking markets to mobile-first emerging economies with limited traditional financial access.

Visa’s existing network relationships and compliance infrastructure are what makes the 2026 timeline plausible. Bridge is using Visa’s market access rather than building its own.

The Disruption Paradox

Visa shares dipped 1.2% in premarket. The market sees the tension that Visa’s crypto head Cuy Sheffield acknowledged: stablecoin wallets need a card to spend value in the real world. Visa is providing that card.

By being the bridge between stablecoin wallets and merchant acceptance, Visa maintains its position in the payment stack. But it also validates stablecoin spending as real behavior, which could accelerate direct stablecoin payment rails that bypass Visa entirely.

The SoFi-Mastercard partnership covered earlier this week is the same logic from Mastercard’s side. Both major card networks are embedding themselves into stablecoin infrastructure rather than fighting it. Whether that strategy captures the transition or just delays displacement depends on how quickly fully on-chain merchant acceptance develops without card intermediaries.

In a move underscoring deepening institutional conviction, cryptocurrency investment firm Bitmine executed a massive $98.6 million Ethereum acquisition last week, significantly expanding its already colossal digital asset treasury. According to on-chain analytics reported by Lookonchain on social media platform X, the firm purchased 50,928 ETH, bringing its total holdings to 4.47 million ETH, a position now valued at approximately $8.66 billion. This strategic accumulation occurs amidst a pivotal period for the Ethereum network and broader digital asset markets, prompting analysis from sector experts.

Bitmine’s Ethereum Purchase: A Deep Dive into the Numbers

The transaction, verified through public blockchain data, represents a continuation of Bitmine’s long-term accumulation strategy. Consequently, the firm’s latest purchase adds substantial weight to its existing portfolio. To illustrate the scale, the 50,928 ETH acquired is equivalent to nearly a full epoch of Ethereum validator entries. For context, the purchase was executed over several transactions, likely to minimize market impact, a common tactic for large-scale institutional buyers. Furthermore, this activity coincides with a period of relative price consolidation for Ethereum, suggesting a value-based investment approach rather than speculative momentum chasing.

Bitmine’s total holdings of 4.47 million ETH now represent a significant portion of the cryptocurrency’s circulating supply. This scale grants the firm considerable influence within the Ethereum ecosystem, particularly regarding network governance and staking dynamics. Moreover, the firm’s actions are closely monitored as a bellwether for institutional sentiment. The decision to deploy nearly $100 million in a single week sends a powerful signal about perceived long-term value. Analysts immediately began assessing the potential market implications of such a concentrated position.

Institutional Strategy and Ethereum’s Evolving Landscape

Bitmine’s purchase is not an isolated event but part of a broader trend of institutional capital entering the cryptocurrency space. However, the firm’s focus on Ethereum is particularly noteworthy. The Ethereum network recently completed its transition to a proof-of-stake consensus mechanism, fundamentally altering its investment thesis. This upgrade, known as “The Merge,” reduced Ethereum’s energy consumption by over 99%, addressing a major concern for traditional finance entities. Subsequently, Ethereum now offers a native staking yield, transforming it from a pure speculative asset into a yield-generating one.

Bitmine's Stunning $98.6 Million Ethereum Purchase Signals Major Institutional Confidence

For a firm like Bitmine, this creates a dual investment proposition: potential capital appreciation and a steady staking reward stream. The firm’s massive holdings could generate substantial annual yield, which may be reinvested or used to fund operations. Additionally, ongoing network upgrades, often called “Ethereum 2.0” or the “Surge,” aim to drastically improve scalability and reduce transaction fees. Therefore, institutions are potentially positioning themselves ahead of these technical improvements, which could drive broader adoption and increased demand for ETH.

Expert Analysis on Whale Accumulation Patterns

Market analysts and blockchain researchers provide critical context for understanding these large transactions. On-chain data firms like Glassnode and CryptoQuant consistently track wallet movements of large holders, often called “whales.” Their data reveals that accumulation by large entities often precedes periods of increased network activity or price discovery. However, experts caution that correlation does not equal causation. The sheer size of Bitmine’s position means its trading activity can materially affect market liquidity. Consequently, the firm likely employs sophisticated treasury management and execution algorithms to mitigate slippage.

Tether CEO Paolo Ardoino and co-founder Reeve Collins have outlined a vision in which autonomous AI agents become the dominant users of stablecoin infrastructure, arguing that traditional banking systems are structurally incapable of serving non-human entities and that USDT and Bitcoin will fill that gap by default.

The Core Argument

The reasoning Ardoino and Collins have presented is grounded in a practical observation about how banking works. Traditional financial institutions like JPMorgan require account holders to be legal entities or individuals who can satisfy KYC requirements, sign contracts, and be held accountable under existing legal frameworks. An autonomous AI agent cannot do any of those things. It has no legal personhood, no identity documents, and no human representative capable of assuming liability on its behalf.

That structural incompatibility means that as AI agents proliferate and begin requiring financial infrastructure to operate, they will not be able to access traditional banking rails. Stablecoins on permissionless blockchains, by contrast, require nothing beyond a wallet address to send and receive value. The account opens itself. No approval needed.

The operational requirements of AI agents compound the argument. These systems run continuously, execute at machine speed, and need to make micropayments for compute power, data access, and API services in real time. Traditional finance operates on business hours, settlement delays, and transaction minimums that are architecturally incompatible with those requirements. Blockchain infrastructure, running 24 hours a day at high throughput, is not.

What Tether Is Building

The strategic response to this thesis is visible in the infrastructure Tether has been developing and investing in across recent months.

The Wallet Development Kit, launched as an open-source modular framework, was built specifically for what Tether describes as “people, machines, and AI agents.” It enables the creation of non-custodial wallets that can be embedded into any software or device, which means an AI agent could instantiate its own wallet as part of its deployment without any human involvement in the setup process.

On February 25th, Tether invested $200 million in Whop, a digital marketplace platform, with a stated goal of implementing AI tools that enable what the company calls agentic income opportunities. The framing is notable. Rather than positioning AI agents purely as cost centers consuming compute and API services, the Whop investment suggests Tether is building toward a model where agents also generate income autonomously.

Earlier in February, Tether invested in LayerZero Labs to support USDt0, its omnichain stablecoin designed to operate seamlessly across multiple blockchains without liquidity fragmentation. For AI agents moving value across different networks as part of their operations, that kind of cross-chain interoperability is not a convenience feature. It is a basic operational requirement.

The Risk Ardoino Is Also Flagging

Tether’s leadership has not presented this vision without caveats. Ardoino has publicly warned about what he describes as a bitcoin AI risk for 2026, specifically the possibility that a bursting AI stock bubble could create risk-off conditions across financial markets that temporarily drag down digital asset prices alongside equities.

The warning is worth taking seriously precisely because it comes from someone with a strong financial interest in the bull case for both Bitcoin and stablecoins. Ardoino is not dismissing the technology. He is acknowledging that valuation excess in AI-adjacent equities could produce a correction that sweeps crypto into the same risk-off move regardless of the underlying fundamentals.

The Scale of the Prediction

Industry observers and Tether executives have put a number on the long-term vision: one trillion AI agents using self-custodial wallets and stablecoins within fifteen years. That figure is more illustrative than precise, but the direction it points is clear. If even a fraction of that adoption materializes, the demand for stablecoin infrastructure at machine scale would represent a structural shift in what USDT is used for and who, or what, is using it.

The financial system was not designed for non-human participants. Tether is building on the assumption that it will need to be.

Nvidia’s (NASDAQ: NVDA) reported record fourth-quarter revenue of $68.1 billion for the period ended Jan. 25, 2026, up 73% year over year and 20% sequentially.

Full-year fiscal 2026 revenue climbed 65% to $215.9 billion, while GAAP gross margins hit 75% in the quarter.

“Computing demand is growing exponentially — the agentic AI inflection point has arrived,” said Nvidia founder and CEO Jensen Huang, calling its AI data center platform Grace Blackwell “the king of inference” and pointing to even lower cost per token with the upcoming Vera Rubin platform.

Yet while AI investors cheered, the blockbuster earnings failed to lift crypto mining stocks.

Why Nvidia earnings move crypto miners

Crypto miners tend to move with, or sometimes against, Nvidia. This is because AI and Bitcoin mining run on the same raw ingredients.

High-performance chips, enormous amounts of electricity, and warehouse-sized data centers.

So when Nvidia posts monster earnings and talks about “exponential” computing demand, that’s not just an AI story. It’s a power-and-hardware story.

Strong results and bullish guidance signal that hyperscalers are scrambling for GPUs and locking in energy capacity. That can mean tighter chip supply and fiercer competition for electricity, neither of which is great news for Bitcoin miners trying to protect their margins.

During the earnings call, CEO Jensen Huang rightly pointed out that “compute equals revenues."

AI factories are scaling fast, and the biggest tech companies are racing to secure as much capacity as they can. Nvidia just returned $41.1 billion to shareholders in fiscal 2026 and still has $58.5 billion authorized for buybacks.

This is a reminder of how much cash this AI cycle is throwing off.

Meanwhile, many Bitcoin miners are also expanding their business strategy to include AI or making a complete pivot to AI. Their biggest concern is that the returns of mining activities are no longer sustainable.

Stablecoin issuer Circle Internet Group reported stronger-than-expected fourth-quarter earnings on Wednesday, driven by rapid growth in its USDC stablecoin business and expanding payments operations, underscoring continued momentum in an otherwise challenging crypto market.

For the quarter ending Dec. 31, 2025, Circle posted revenue of $770 million, a 77% increase from a year earlier, and reported net income of $133.4 million, or 43 cents per share. Analysts expected per-share earnings of 16 cents on revenue of $747 million.

The strong quarter was fueled in part by a 72% year-on-year increase in the circulation of Circle’s US dollar-pegged stablecoin, USDC (USDC), which reached about $75.3 billion by year-end.

For the full year 2025, Circle reported revenue of $2.7 billion, up 64% from the prior year. The company recorded a net loss of $70 million for the year, largely due to $424 million in stock-based compensation tied to its 2025 initial public offering (IPO).

Despite the annual loss, operating income was positive at about $157 million, reflecting solid underlying performance.

Circle’s shares surged on the news, rising more than 20% in early trading Wednesday morning, to nearly $74.

Arc rollout and policy tailwinds bolster Circle’s expansion

Circle highlighted several operational milestones during the quarter, including the public testnet launch of Arc, its new blockchain infrastructure platform designed to help institutions build tokenized financial applications. More than 100 institutional participants have joined the testnet, the company said.

The Circle Payments Network, a cross-border payments coordination layer enabling banks to settle transactions using stablecoins, expanded to 55 financial institutions, with additional companies undergoing eligibility review and onboarding.

While Circle is best known for issuing USDC, the world’s second-largest stablecoin by market capitalization, its euro-denominated stablecoin, EURC, also posted strong growth. EURC circulation reached 310 million euros ($365 million), up 284% year over year.

Circle has also benefited from a more favorable regulatory backdrop in the United States under President Donald Trump’s administration, including the passage of the GENIUS Act, which establishes a federal framework for payment stablecoins and issuer oversight.

However, broader industry momentum has faced hurdles. As The Wall Street Journal reported, progress on a separate market structure bill known as the CLARITY Act has stalled amid ongoing tensions between crypto industry advocates and banking groups over issues including stablecoin yield and reward mechanisms.

The Ethereum Foundation has begun staking a portion of its treasury holdings, marking a notable shift in how the organization manages its ETH reserves and participates in the network’s proof-of-stake system.

According to the Foundation, approximately 70,000 ETH has been allocated for staking, with an initial tranche already deposited into validator infrastructure.

The move allows the nonprofit to earn staking rewards while contributing directly to the security and decentralization of the Ethereum network.

Under Ethereum’s proof-of-stake model, validators lock up ETH to help process transactions and secure the blockchain in exchange for yield.

By staking part of its treasury, the Foundation is effectively turning dormant reserves into productive capital. The rewards generated will flow back into the Foundation’s treasury to help fund ecosystem development, protocol research, grants, and other core initiatives.

The decision follows the rollout of a revised treasury management strategy first outlined in 2025. That policy emphasized sustainability and long-term financial planning, including using native staking as a low-risk way to support operations without liquidating significant ETH holdings.

The Foundation said it is leveraging open-source staking infrastructure and client diversity to ensure operational resilience and minimize centralization risks.

By distributing validator responsibilities across different setups, it aims to uphold Ethereum’s core principles of decentralization and neutrality.

The announcement comes at a time when institutional interest in Ethereum staking continues to grow.

As regulatory clarity improves in several jurisdictions, staking is increasingly viewed as a compliant yield mechanism compared to more speculative crypto strategies.

Market observers say the Foundation’s decision could encourage other large ETH holders to adopt similar treasury approaches.

By actively participating in validation, the Ethereum Foundation reinforces confidence in the network’s economic model while aligning its financial strategy with the long-term health of the ecosystem.

Standard Chartered analysts stuck to their forecast that the stablecoin market will reach $2 trillion by late 2028, despite lowering expectations for short-term US Treasury bill demand.

Stablecoins like Tether’s USDt (USDT) and Circle’s USDC (USDC) are expected to push T-bill demand to $2.2 trillion by 2028, Standard Chartered analyst Geoffrey Kendrick and US rates strategist John Davies said in a Monday report shared with Cointelegraph.

Despite the US dollar stablecoin market cap stalling at around $300 billion in recent months amid a broader crypto downturn, the analysts remain bullish since the passage of the US GENIUS Act in 2025.

“We see these issues as cyclical rather than structural, and we continue to expect stablecoin market cap to reach $2 trillion by end-2028,” Standard Chartered’s report said.

Stablecoins may drive Treasury to issue more bills despite lowered demand

According to Standard Chartered, stablecoins are now expected to generate an additional $800 billion to $1 trillion in fresh T-bill demand for use as reserves by late 2028, a hefty reduction from the $1.6 trillion projected in April 2025, despite the passage of the GENIUS Act.

Standard Chartered analysts still expect that the US Treasury may use this potential excess demand as justification to issue more T-bills. They cited Treasury Secretary Scott Bessent’s statements in early February in which he suggested the GENIUS Act could be “an important feature of financing the US government.”

The Treasury’s quarterly refunding announcement on the same day also cited “growing demand for Treasury bills from the private sector,” the analysts noted, adding:

“Stablecoin-related demand, in conjunction with the Fed’s recent decision to commence RMPs [reserve management purchases] and replace its maturing MBS [mortgage-backed securities] with T-bills, could arguably cause T-bills to become overly scarce.”

In addition to forecasting stablecoins to reach $2 trillion by the end of 2028, Standard Chartered previously expected Bitcoin (BTC) to hit $500,000 over the same period.

Amid ongoing uncertainty in crypto markets, the bank’s analysts have recently lowered their BTC price target for 2026 from $150,000 to $100,000, projecting that the cryptocurrency could fall as low as $50,000 before a potential recovery.

MicroStrategy now holds 717,131 BTC after purchasing 2,486 BTC for $168.4 million, as reported by CryptoRank. The update reinforces michael saylor’s ongoing accumulation strategy around the company’s bitcoin treasury.

Prior commentary had cited roughly 714,644 BTC with an average cost near $76,056 per coin before the latest purchase, according to Investing.com. The subsequent addition lifts reported holdings and underscores management’s stated intent to keep adding over time.

Why it matters: debt, refinancing stance, and risk tolerance

Saylor has articulated a refinancing-over-selling stance and indicated the company would endure significant bitcoin drawdowns by extending obligations rather than liquidating core holdings, as reported by Barron’s. That posture implies a willingness to accept equity volatility in exchange for long-horizon bitcoin exposure.

Observers describe the liability side as long-dated and largely in convertible-note form, limiting margin-call dynamics relative to collateralized loans, according to CCN. In practice, that structure gives management time to manage liquidity and capital access through cycles, though it concentrates performance risk in bitcoin.

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Immediate impact on MSTR stock, NAV premium, and investors

At the time of this writing, MSTR most recently closed at $131.05 on February 20, based on data from Yahoo Finance. Near-term trading will likely continue to reflect bitcoin volatility, funding conditions, and sentiment toward leveraged bitcoin proxies.

MicroStrategy’s equity can trade at a premium or discount to the net asset value (NAV) of its bitcoin holdings due to embedded leverage, equity optionality, and capital-raising flexibility. When sentiment weakens or dilution risk rises, that premium can compress into a discount.

Bitcoin recently dipped below $68,000 amid volatility, as reported by Coingape. Such moves can quickly alter perceived upside from leverage, changing the gap between NAV and market capitalization for MSTR.

Analyst reactions to Michael Saylor Bitcoin strategy and MSTR

Supportive views and nuanced confidence in long-term thesis

Some brokers have tempered expectations while maintaining confidence in the long-term thesis. Cantor Fitzgerald, for example, materially trimmed its 12‑month target but kept a positive rating on the shares, as reported by the Financial Times.

Others argue that a stock premium over bitcoin NAV can be rational if the company increases bitcoin per share and manages capital adeptly. “Not unreasonable,” said Adam Back, CEO of Blockstream, as reported by Cointelegraph.

Critical flags: index risk, dilution, concentration, sentiment

Skeptics highlight concentration in bitcoin, potential exclusion from major indices, and the possibility of forced selling by benchmarked funds if that occurs, according to Forbes. They also flag that equity, debt, or preferred issuance at unfavorable terms could dilute shareholders if the NAV premium narrows.

Wealth managers have questioned whether repeatedly issuing securities to buy bitcoin ultimately destroys value if bitcoin underperforms. Ross Gerber has been particularly critical of the model’s sustainability, as reported by TheStreet.

FAQ about Michael Saylor Bitcoin

If Bitcoin drops sharply, will MicroStrategy sell or refinance, how does its debt structure work?

Saylor indicates refinancing over selling, even in deep drawdowns. Debt is largely long‑dated convertibles with few margin calls, so liquidity pressure is time‑managed, not immediate.

Why does MSTR trade at a premium or discount to its Bitcoin net asset value (NAV)?

Premium reflects leverage, corporate optionality, and investor demand; discounts emerge when sentiment weakens, dilution risk rises, or BTC underperforms relative to embedded leverage in the equity.