$1.8 trillion banking large Morgan Stanley has filed with the U.S. Securities and Change Fee (SEC) to launch two exchange-traded funds (ETFs) that can observe the value of Bitcoin and Solana.
The submitting marks a turning level for the Wall Road large, pushing one of many world’s most well-known banking manufacturers deeper into the crypto ecosystem.
Matt Hogan, chief funding officer at Bitwise, stated the financial institution presently oversees 20 ETFs, the vast majority of that are operated below subsidiary manufacturers similar to Calvert, Parametric and Eaton Vance.
Consequently, the proposed Bitcoin and Solana funds would mark solely the third and fourth cases of the ETF with the mother or father firm’s “Morgan Stanley” nameplate.
With that in thoughts, the financial institution is leveraging its model to make a severe bid for a bigger slice of the crypto ETF market, Hogan stated. He identified:
“Consensus view: Establishments are shifting slowly in direction of crypto. Correct view: Establishments are charging full steam forward with crypto and consider it’s a key enterprise precedence.”
Contents of the prospectus
In line with the preliminary prospectus, each trusts are designed as passive funding autos. Their mission is to trace the market worth of the underlying tokens with out utilizing leverage or implementing aggressive buying and selling methods.
Nonetheless, the particular trade title for itemizing stays unknown and the ticker image has not but been decided. Nonetheless, the operational construction guiding every fund is clearly outlined.
For the Morgan Stanley Bitcoin Belief, Morgan Stanley Funding Administration, Inc. has been designated because the sponsor. The fund intends to calculate the day by day worth of its shares utilizing a benchmark derived from commerce flows executed throughout main spot Bitcoin exchanges.
Operationally, the Belief expects to deal with the shopping for and promoting of BTC, primarily to facilitate the creation and redemption of inventory baskets.
Nonetheless, the submitting notes that Bitcoin may be liquidated to cowl bills and that prime dealer preparations could also be used to execute these trades.
The Morgan Stanley Solana Belief companion submitting largely mirrors this structural template, however introduces a key innovation: the incorporation of staking rewards.
The product is designed to not solely observe the value of SOL tokens, but in addition “mirror the rewards of staking a portion of the belief’s SOL.”
To perform this, Sponsor plans to contract with a third-party staking service supplier. The submitting outlines how the belief will distribute compensation to shareholders on a quarterly foundation in accordance with present Inner Income Service steering.
This characteristic makes it considerably extra complicated to function in comparison with common BTC funds.
The prospectus particulars protocol-specific constraints, similar to warm-up, activation, and withdrawal intervals which will end in short-term inaccessibility of staked property. We additionally clearly warn that technical failures or malicious actions by staking suppliers can negatively impression reward technology.
Financially, this construction immediately ties sponsor income to the effectivity of staking operations.
The submitting additionally revealed {that a} portion of the staking rewards, expressed as a share, will stay undisclosed at this preliminary stage and might be paid to sponsors after prices are resolved.
Why Morgan Stanley filed for Bitcoin and Solana ETFs
Morgan Stanley’s timing coincides with the convergence of favorable political adjustments and regulatory streamlining.
With the return of President Donald Trump, the SEC has launched a extra cryptocurrency-friendly regulatory surroundings, encouraging conventional monetary establishments to take part extra broadly on this house.
Behind the scenes, regulators not too long ago overhauled the “plumbing” required to convey these merchandise to market. The SEC authorised main rule adjustments in September that permit nationwide exchanges to implement frequent itemizing requirements for commodity-based belief shares, a class that features digital property.
This procedural replace means that eligible ETFs might be able to keep away from the prolonged case-by-case rule change course of that has historically delayed product launches.
On the identical time, federal banking regulators are softening their stance on banks’ position as intermediaries. In December, the Workplace of the Comptroller of the Foreign money issued Interpretive Letter No. 1188, confirming that nationwide banks might conduct “risk-free principal” transactions involving crypto property.
The steering successfully permits banks to purchase and promote digital property as intermediaries in offsetting transactions, offered they adjust to security and soundness requirements.
However, these exterior elements mirror adjustments in Morgan Stanley’s inner insurance policies.
The corporate has steadily expanded its observe report within the cryptocurrency funding discipline. Final 12 months, it set a 4% allocation cap for “opportunistic” portfolios that maintain digital property.
Moreover, the wealth administration sector has universalized entry to cryptocurrencies, opening these investments to all buyer accounts, together with retirement plans.
On the identical time, the key financial institution revealed plans to roll out crypto buying and selling companies on the E*Commerce platform within the first half of 2026.
Taken collectively, Nova Deus Wealth Retailer President Nate Geraci emphasised that the financial institution’s resolution to fabricate its personal merchandise represents a pure subsequent step following expanded distribution.
He identified:
“Again in October, Morgan Stanley lifted restrictions on monetary advisors recommending crypto ETFs…now launching their very own ETFs, which is sensible given Morgan’s giant distribution.Clearly, they acknowledged the massive demand from their shoppers for crypto ETFs.”
Ethereum and XRP skipped
Whereas the financial institution is shifting ahead with Bitcoin and Solana, it has considerably averted Ethereum and XRP on this submitting cycle, a choice that stands in distinction to current movement knowledge for these property.
By the use of background, the U.S. spot XRP ETF has proven outstanding stability since its launch on November 13, sustaining a “inexperienced streak” with zero outflows. With this, cumulative inflows exceeded the $1 billion mark in lower than two months.
In the meantime, Ethereum’s exclusion is much more putting given its market capitalization and rising institutional investor curiosity.
Ethereum ETFs have seen greater than $340 million in inflows within the first two days of the 12 months, in accordance with knowledge from SoSo Worth.
These flows observe the fund’s efficiency in late 2025, when roughly 18% of inflows into this class left the system.
There have been about $2.8 billion in outflows from these funds for the reason that Oct. 10 pre-liquidation peak of $15 billion.
Consequently, Ethereum Group’s complete property below administration have retreated to about $19 billion, down from a excessive of greater than $32 billion in early October.
Both method, institutional curiosity in Ethereum funds stays sturdy, as evidenced by inflows earlier this 12 months.