Morgan Stanley Rolls Out Spot Ethereum and Solana ETFs, Becoming the First U.S. Bank-Affiliated Asset Manager to Issue Crypto Funds
Morgan Stanley’s investment management arm launched spot Ethereum and Solana ETFs on NYSE Arca on July 28, according to CoinGape, making the Wall Street bank the first U.S. bank-affiliated asset manager to issue a spot crypto ETF. The two funds trade under the tickers MSSE and MSOL, track the underlying Ethereum and Solana prices, and offer staking for the assets held inside the trust, a structure that mirrors the approach BlackRock’s IBIT fund pioneered for Bitcoin last year and applies it to multiple chains at once.
The launch follows the approval Morgan Stanley received from NYSE Arca last week to list both funds. The bank’s asset management division will charge a management fee of 0.14%, which is among the cheapest in the spot crypto ETF complex and well below the 0.25% to 0.30% charged by issuers like Fidelity and Galaxy when they launched similar products in 2024. Combined with the new staking reward distribution, the fee structure has the potential to pull both institutional and retail flows away from incumbent issuers whose products carry higher expense ratios.
Building on a Bitcoin ETF That Already Holds $396 Million
The Ethereum and Solana funds expand Morgan Stanley’s crypto lineup alongside the spot Bitcoin ETF it launched earlier this year. That Bitcoin fund already holds over $396 million in net assets, according to SoSoValue data as of July 27. The expansion is the first multi-chain spot offering from any major U.S. bank-affiliated asset manager, and it lands with a much larger distribution network than any of its crypto-native rivals: Morgan Stanley’s wealth management business serves more than 17,000 financial advisors managing over $6.5 trillion in client assets.
For retail clients, the new ETFs remove the operational friction of staking directly, which on Ethereum still requires a 32 ETH validator deposit plus monitoring infrastructure. For advisors at Morgan Stanley, the products offer an in-house product to recommend instead of routing clients to outside crypto platforms.
What Staking Inside an ETF Actually Means
Staking inside an ETF requires the issuer to run validators on behalf of the fund. For Ethereum, that means depositing 32 ETH per validator and operating a slashing-aware validator client with near-perfect uptime. For Solana, validators accept smaller stakes but require careful management of skip-rate and vote latency. The 0.14% management fee will cover the validator operations, MEV-related rewards (the priority-fee income that validators capture by ordering transactions), and the staking rewards that are passed back to ETF holders net of fees.
This is materially more complex than running a passive spot Bitcoin ETF. Issuers have to decide whether to pool validator operations, integrate with third-party staking-as-a-service providers like Figment and Coinbase Custody, or operate validators directly. The staked ETH and SOL still sit on-chain inside segregated wallets controlled by the ETF custodian, which means the SEC’s qualified custodian rule continues to apply. The arrangement has been pre-cleared with the SEC’s Division of Trading and Markets and the Division of Investment Management after a multi-round consultation that concluded in June.
Wider Push Into the Crypto Stack
The ETFs are part of a much broader Morgan Stanley crypto roadmap. The bank’s E*TRADE brokerage completed the rollout of spot Bitcoin, Ethereum, and Solana trading to its customers in May. Morgan Stanley has also applied to the Office of the Comptroller of the Currency for a charter to operate a national trust bank focused on digital assets, an authorization that would let it custody crypto directly rather than relying on third-party custodians.
This is a deeper move into crypto than peers like Goldman Sachs, which has a tokenization focus rather than a spot ETF franchise, and JPMorgan, which is rolling out tokenized money market funds but has steered clear of consumer spot crypto trading. Morgan Stanley’s bet, judging from the breadth of its application, is that bank-issued wrappers around crypto assets will become a structural competitor to crypto-native exchanges and that owning the wrapper is more valuable than trading on the underlying venues.
Macro Context and Near-Term Flows
The launches come in a week of mixed ETF flows across the spot crypto complex. Bitcoin ETFs are on a three-day streak of net outflows after seven consecutive days of net inflows, according to SoSoValue data. Ethereum ETFs have seen six days of net inflows out of the last eight trading sessions, and Solana ETFs have had four days of net inflows over a similar window, with two days of zero flows. The mixed picture suggests no broad rush into crypto, but consistent institutional allocation nonetheless.
The launch also lands amid a broader risk-off backdrop in crypto markets. Bitcoin has slipped after a retest of the $65,000 psychological level, and optimism that the U.S. Senate will pass the CLARITY Act before its August recess has faded. Senate leaders put the CLARITY Act on hold last week in favor of other pending bills, including a funding package for the Consumer Financial Protection Bureau and a bipartisan housing finance measure. The delay does not affect the ETF launch directly, since CLARITY primarily addresses market structure and stablecoin reserves, but it dampens the broader sentiment backdrop against which Morgan Stanley’s two new products begin trading.
What to Watch in the First 60 Days
The first two months of trading will set the tone for whether bank-affiliated wrappers are competitive against crypto-native issuers. Net inflows at the MSSE and MSOL tickers above $100 million each in the first 60 days would suggest that advisors are moving clients off Fidelity, Grayscale and smaller spot issuers. Persistent underperformance against ETHA and EZBC on the Ethereum side or BSOL and the VanEck Solana products on the Solana side would be a sign that the bank channel cannot break existing advisor relationships.
Beyond the flow data, market participants will watch whether Morgan Stanley follows through on the spot XRP and spot Cardano funds rumored to be in the pipeline, and whether the OCC approves the digital asset trust bank charter before year-end. Both decisions would shape whether the bank becomes the dominant crypto distribution platform for U.S. wealth management or simply one of several large issuers competing for share.