Morgan Stanley Bitcoin ETF Launch

Morgan Stanley's spot Bitcoin ETF (MSBT) was approved and is expected to begin trading within days. Priced at 14 basis points, it undercuts every existing product on the market, including BlackRock's iBit at 25 bps. Morgan Stanley is also waiving fees on the first $5 billion for the first six months. Back-of-the-envelope math suggests that even a 0.5% allocation across their $9 trillion client base would rival iBit in size. The group consensus landed around Fidelity-level AUM by year end, roughly 200,000 to 250,000 BTC. The bigger story is what Morgan Stanley is building beyond the ETF. Unlike BlackRock, they are a bank. They are building custody infrastructure, pursuing a national trust charter, and positioning to monetize Bitcoin exposure across lending, SMAs, and the full banking stack.

Bitcoin-Backed Mortgages: Coinbase, Fannie Mae, and Better

The first crypto-backed conforming mortgages are here. Borrowers can pledge Bitcoin as collateral for a home purchase at roughly 40% LTV with no liquidation risk from Bitcoin price volatility. Rates are higher than a traditional mortgage but lower than private Bitcoin lending markets. Fannie Mae's involvement means these loans are conforming, which opens the door to broader capital market participation. The group flagged the obvious concern: Coinbase is the sole custodian on a product that could run 10 to 30 years. A strong V1, but the custody architecture needs to evolve.

Stablecoin Legislation

The Clarity Act continues to move forward, though Coinbase's political leverage has slowed progress. The stablecoin yield and rewards debate is likely to land on a qualifying action compromise rather than a blanket prohibition. Both Michael and Liam expect passage by Q2, driven in part by midterm pressure.

BitGo Earnings and Gemini Lawsuit

BitGo's stock is down materially since its IPO, though the business continues to grow its asset base and recently secured an OCC banking charter. Trade fee compression from 47 to 21 basis points reflects a broader industry trend. Gemini is facing a class action lawsuit alleging misrepresentation of business viability and growth trajectory. The company is withdrawing from international markets and projecting losses through 2029. Michael made a call: Gemini gets acquired within 21 months.

GameStop Covered Calls and Marathon's AI Pivot

GameStop moved its Bitcoin to Coinbase Prime and began writing covered calls at 105,000 to 110,000 strikes, effectively capping the upside on its own treasury position. Marathon is selling Bitcoin to retire debt and shift resources toward AI data center infrastructure. The group treated both as evidence that many digital asset treasury plays lack genuine long-term conviction and are chasing whatever narrative the market rewards in the moment.

Square and Block Bitcoin Payments

Square is auto-enabling Bitcoin payments across all US merchants, removing the manual setup friction that limited adoption since the initial rollout in November. Buyers will soon be able to toggle on Bitcoin payments from their side as well. The real innovation is Lightning running in the background, enabling both sides to transact without touching interchange rails.

Tether Audit and AI Spending

Tether signed KPMG for its first full audit, a necessary step for operating USAT in the United States. Circle's stock dropped 19% around the same time. The group discussed Ramp's data showing that the top 25% of companies by AI spending have grown revenue over 100% since 2022, compared to under 20% for the bottom quartile. The conversation tied into the emerging need for native digital value transfer as agentic infrastructure scales, with stablecoins as the V1 and Bitcoin or Lightning as the inevitable endpoint.

Closing Theme

The throughline across every topic was financial nihilism versus long-term thinking. Coinbase, Robinhood, and DraftKings are all converging on the same short-term, gambling-driven product surface. Onramp and Early Riders are building for savers and builders. Liam closed with a plug for the Stables accelerator at Early Riders, focused on seed-stage companies building for the long term.