Morgan Stanley, the $1.8 trillion banking big, has utilized to launch two exchange-traded funds (ETFs) monitoring the costs of Bitcoin and Solana with the US Securities and Alternate Fee (SEC).
The filings mark a watershed second for the Wall Road big, pushing one of many world’s most recognizable banking manufacturers deeper into the crypto ecosystem.
Matt Hougan, the Chief Funding Officer at Bitwise, noticed that whereas the financial institution at present oversees a roster of 20 ETFs, the overwhelming majority function below its subsidiary manufacturers, similar to Calvert, Parametric, or Eaton Vance.
Consequently, the proposed Bitcoin and Solana funds would mark solely the third and fourth situations of ETFs bearing the mother or father “Morgan Stanley” nameplate.
With that in thoughts, Hougan mentioned the financial institution is leveraging its model to make a critical bid for a bigger slice of the crypto ETF market. He famous:
“Consensus View: Establishments are slowly warming as much as crypto. Correct View: Establishments are charging at crypto full-speed and see it as a key enterprise precedence.”
Contained in the prospectus
Based on the preliminary prospectuses, each trusts are engineered as passive funding autos. Their mandate is to trace the market worth of the underlying tokens with out using leverage or partaking in energetic buying and selling methods.
Nonetheless, their particular alternate for itemizing stays unnamed, and the ticker symbols are but to be decided. Nonetheless, the operational mechanics guiding every fund have been clearly outlined.
For the Morgan Stanley Bitcoin Belief, Morgan Stanley Funding Administration Inc. is designated because the sponsor. The fund intends to calculate the every day worth of its shares utilizing a benchmark derived from executed commerce flows throughout main spot bitcoin exchanges.
Operationally, the belief expects to deal with the acquisition and sale of BTC primarily to facilitate the creation and redemption of share baskets.
Nonetheless, the submitting notes that Bitcoin may be liquidated to cowl bills, doubtlessly using a chief dealer association to execute these transactions.
The accompanying submitting for the Morgan Stanley Solana Belief largely mirrors this structural template however introduces a crucial innovation: the inclusion of staking rewards.
The product is designed not solely to trace the worth of the SOL token but additionally to “replicate rewards from staking a portion of the Belief’s SOL.”
To attain this, the sponsor plans to contract with third-party staking service suppliers. The submitting outlines a mechanism for the belief to distribute rewards to shareholders quarterly, in accordance with present Inner Income Service steerage.
This characteristic introduces vital operational complexity in comparison with plain-vanilla BTC funds.
The prospectus particulars protocol-specific constraints, together with warm-up, activation, and withdrawal intervals that may render staked property briefly inaccessible. It additionally explicitly warns that technical failures or malicious actions by staking suppliers might negatively affect reward technology.
Financially, the construction ties the sponsor’s income on to the staking operation’s effectivity.
The submitting additionally disclosed {that a} portion of the staking rewards, expressed as a proportion, the quantity of which stays undisclosed on this preliminary stage, can be paid to the sponsor after prices are settled.
Why Morgan Stanley filed for Bitcoin and Solana ETFs
Morgan Stanley’s timing aligns with a convergence of favorable political shifts and regulatory streamlining.
The return of President Donald Trump to workplace has ushered in a extra crypto-friendly regulatory surroundings on the SEC, encouraging conventional monetary establishments to take part extra broadly within the sector.
Behind the scenes, regulators lately overhauled the “plumbing” required to deliver these merchandise to market. In September, the SEC authorised vital rule modifications allowing nationwide exchanges to implement generic itemizing requirements for commodity-based belief shares, a class that features digital property.
This procedural replace means that qualifying ETFs could now bypass the prolonged, case-by-case rule-change course of that traditionally delayed product launches.
Concurrently, federal banking regulators have softened their stance on banks’ function as intermediaries. In December, the Workplace of the Comptroller of the Foreign money issued Interpretive Letter 1188, confirming that nationwide banks could interact in “riskless principal” transactions involving crypto property.
This steerage successfully permits banks to purchase and promote digital property as intermediaries in offsetting trades, supplied they adhere to security and soundness requirements.
In the meantime, these exterior components mirror Morgan Stanley’s inner coverage shifts.
The agency has steadily expanded its footprint within the crypto funding house. Final yr, it established a 4% allocation cap for “opportunistic” portfolios holding digital property.
Moreover, the wealth administration division moved to universalize crypto entry, opening these investments to all shopper accounts, together with retirement plans.
On the identical time, the banking big has revealed plans to roll out a crypto buying and selling service on the E*Commerce platform within the first half of 2026.
Taken collectively, Nate Geraci, President of the Nova Dius Wealth Retailer, emphasised that the financial institution’s determination to fabricate its personal merchandise represents a logical subsequent step following its distribution enlargement.
He famous:
“Again in October, Morgan Stanley dropped restrictions on monetary advisors recommending crypto ETFs…Now launching their very own. Is sensible given Morgan’s large distribution. Clearly they had been seeing significant demand from purchasers for crypto ETFs.”
Ethereum and XRP skipped
Whereas the financial institution is advancing with Bitcoin and Solana, it has notably bypassed Ethereum and XRP on this submitting cycle, a call that contrasts with current move knowledge for these property.
For context, spot XRP ETFs within the US have demonstrated exceptional consistency, sustaining a “inexperienced streak” with zero days of outflows since their launch on Nov. 13. This has pushed cumulative inflows previous the $1 billion mark in below 2 months.
In the meantime, the exclusion of Ethereum stands out much more given its market capitalization and rising institutional curiosity.
Ethereum ETFs have generated inflows of greater than $340 million inside the first two days of the yr, based on SoSo Worth knowledge.
These flows observe the funds’ efficiency in late 2025, when the class noticed roughly 18% of its inflows exit the system.
Since peaking at $15 billion earlier than the liquidations on Oct. 10, these funds bled round $2.8 billion.
Consequently, whole property below administration for the Ethereum group retracted to roughly $19 billion, down from a excessive of over $32 billion in early October.
Regardless, institutional curiosity, as evidenced by this yr’s early inflows, stays sturdy in Ethereum funds.
