Morgan Stanley debuts Ethereum and Solana ETPs with staking benefits
- Morgan Stanley has launched Ethereum and Solana ETPs, offering investors spot exposure through regulated investment products.
- The Morgan Stanley Ethereum Trust and Solana Trust began trading on NYSE Arca with a 0.14% expense ratio.
- Both products distribute staking rewards to shareholders, allowing investors to potentially earn additional returns.
Morgan Stanley has launched two spot exchange-traded funds (ETFs) offering investors exposure to Ethereum (ETH) and Solana (SOL), expanding the firm's range of cryptocurrency investment products.
Morgan Stanley rolls out ETFs for Ethereum and Solana
The Morgan Stanley Ethereum Trust (MSSE) and Morgan Stanley Solana Trust (MSOL) have begun trading on the NYSE Arca, providing exposure to the spot prices of Ethereum (ETH) and Solana (SOL).
Both ETFs carry an expense ratio of 0.14% and intend to stake a portion of their respective ETH or SOL holdings to earn staking rewards. Morgan Stanley noted that it will not retain any portion of the rewards generated by either fund.
MSSE will seek to track ETH's performance using the CoinDesk Ether Benchmark 4 PM NY Settlement Rate, while MSOL will track SOL's performance using the CoinDesk Solana Benchmark 4 PM NY Settlement Rate.
The launch expands Morgan Stanley's cryptocurrency ETF offering following the introduction of the Morgan Stanley Bitcoin Trust (MSBT) earlier this year. The Bitcoin ETF, which was the firm's first cryptocurrency ETF, held more than $381 million in assets under management as of July 16.
With the addition of MSSE and MSOL, Morgan Stanley now offers ETFs linked to BTC, ETH and SOL, three of the largest digital assets by market cap.
Morgan Stanley's low fees could boost its altcoin products
Bloomberg senior ETF analyst Eric Balchunas commented on the launch, citing Morgan Stanley's extensive distribution network and the low fees on the new funds.
Balchunas noted that the 0.14% sponsor fee makes both ETFs the cheapest spot products in their respective categories. He also highlighted Morgan Stanley's reach across the wealth management industry, arguing that the firm's scale could make the launches significant for the broader crypto ETF market.
"[In my opinion], Morgan Stanley is biggest ether and sol launch since the initial ETFs (just as their bitcoin launch was more notable since IBIT) simply [because] of their sheer size and reach," Balchunas wrote in a post on X.
Morgan Stanley's Global Head of ETFs, Ally Wallace, said the new products are part of the firm's broader expansion of its ETF offering.
“The addition of MSSE and MSOL reflects the natural evolution of our product suite, which seeks to provide simplified access to digital assets through the ETP wrapper,” Wallace said in a Tuesday statement.
The firm added that its ETF products have grown to more than $14 billion in assets under management since it introduced its first ETFs in 2023.
The launch comes as asset managers continue to expand access to regulated investment products tied to digital assets.
ETH and SOL are trading at $1,918 and $74.16, down 1% and 1.6%, respectively, over the past 24 hours at the time of writing.
Crypto ETF FAQs
An Exchange-Traded Fund (ETF) is an investment vehicle or an index that tracks the price of an underlying asset. ETFs can not only track a single asset, but a group of assets and sectors. For example, a Bitcoin ETF tracks Bitcoin’s price. ETF is a tool used by investors to gain exposure to a certain asset.
Yes. The first Bitcoin futures ETF in the US was approved by the US Securities & Exchange Commission in October 2021. A total of seven Bitcoin futures ETFs have been approved, with more than 20 still waiting for the regulator’s permission. The SEC says that the cryptocurrency industry is new and subject to manipulation, which is why it has been delaying crypto-related futures ETFs for the last few years.
Yes. The SEC approved in January 2024 the listing and trading of several Bitcoin spot Exchange-Traded Funds, opening the door to institutional capital and mainstream investors to trade the main crypto currency. The decision was hailed by the industry as a game changer.
The main advantage of crypto ETFs is the possibility of gaining exposure to a cryptocurrency without ownership, reducing the risk and cost of holding the asset. Other pros are a lower learning curve and higher security for investors since ETFs take charge of securing the underlying asset holdings. As for the main drawbacks, the main one is that as an investor you can’t have direct ownership of the asset, or, as they say in crypto, “not your keys, not your coins.” Other disadvantages are higher costs associated with holding crypto since ETFs charge fees for active management. Finally, even though investing in ETFs reduces the risk of holding an asset, price swings in the underlying cryptocurrency are likely to be reflected in the investment vehicle too.
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