Morgan Stanley, the $1.8 trillion banking giant, has applied to launch two exchange-traded funds (ETFs) tracking the prices of Bitcoin and Solana with the US Securities and Exchange Commission (SEC).
The filings mark a watershed moment for the Wall Street giant, pushing one of the world’s most recognizable banking brands deeper into the crypto ecosystem.
Matt Hougan, the Chief Investment Officer at Bitwise, observed that while the bank currently oversees a roster of 20 ETFs, the vast majority operate under its subsidiary brands, such as Calvert, Parametric, or Eaton Vance.
Consequently, the proposed Bitcoin and Solana funds would mark only the third and fourth instances of ETFs bearing the parent “Morgan Stanley” nameplate.
With that in mind, Hougan said the bank is leveraging its brand to make a serious bid for a larger slice of the crypto ETF market. He noted:
“Consensus View: Institutions are slowly warming up to crypto. Accurate View: Institutions are charging at crypto full-speed and see it as a key business priority.”
Inside the prospectus
According to the preliminary prospectuses, both trusts are engineered as passive investment vehicles. Their mandate is to track the market price of the underlying tokens without utilizing leverage or engaging in active trading strategies.
However, their specific exchange for listing remains unnamed, and the ticker symbols are yet to be determined. Still, the operational mechanics guiding each fund have been clearly defined.
For the Morgan Stanley Bitcoin Trust, Morgan Stanley Investment Management Inc. is designated as the sponsor. The fund intends to calculate the daily value of its shares using a benchmark derived from executed trade flows across major spot bitcoin exchanges.
Operationally, the trust expects to handle the purchase and sale of BTC primarily to facilitate the creation and redemption of share baskets.
However, the filing notes that Bitcoin could also be liquidated to cover expenses, potentially utilizing a prime broker arrangement to execute these transactions.
The accompanying filing for the Morgan Stanley Solana Trust largely mirrors this structural template but introduces a critical innovation: the inclusion of staking rewards.
The product is designed not only to track the price of the SOL token but also to “reflect rewards from staking a portion of the Trust’s SOL.”
To achieve this, the sponsor plans to contract with third-party staking service providers. The filing outlines a mechanism for the trust to distribute rewards to shareholders quarterly, in accordance with current Internal Revenue Service guidance.
This feature introduces significant operational complexity compared to plain-vanilla BTC funds.
The prospectus details protocol-specific constraints, including warm-up, activation, and withdrawal periods that can render staked assets temporarily inaccessible. It also explicitly warns that technical failures or malicious actions by staking providers could negatively impact reward generation.
Financially, the structure ties the sponsor’s revenue directly to the staking operation’s efficiency.
The filing also disclosed that a portion of the staking rewards, expressed as a percentage, the amount of which remains undisclosed in this preliminary stage, will be paid to the sponsor after costs 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 office has ushered in a more crypto-friendly regulatory environment at the SEC, encouraging traditional financial institutions to participate more broadly in the sector.
Behind the scenes, regulators recently overhauled the “plumbing” required to bring these products to market. In September, the SEC approved significant rule changes permitting national exchanges to implement generic listing standards for commodity-based trust shares, a category that includes digital assets.
This procedural update suggests that qualifying ETFs may now bypass the lengthy, case-by-case rule-change process that historically delayed product launches.
Concurrently, federal banking regulators have softened their stance on banks’ role as intermediaries. In December, the Office of the Comptroller of the Currency issued Interpretive Letter 1188, confirming that national banks may engage in “riskless principal” transactions involving crypto assets.
This guidance effectively allows banks to buy and sell digital assets as intermediaries in offsetting trades, provided they adhere to safety and soundness standards.
Meanwhile, these external factors mirror Morgan Stanley’s internal policy shifts.
The firm has steadily expanded its footprint in the crypto investment space. Last year, it established a 4% allocation cap for “opportunistic” portfolios holding digital assets.
Furthermore, the wealth management division moved to universalize crypto access, opening these investments to all client accounts, including retirement plans.
At the same time, the banking giant has revealed plans to roll out a crypto trading service on the E*Trade platform in the first half of 2026.
Taken together, Nate Geraci, President of the Nova Dius Wealth Store, emphasized that the bank’s decision to manufacture its own products represents a logical next step following its distribution expansion.
He noted:
“Back in October, Morgan Stanley dropped restrictions on financial advisors recommending crypto ETFs…Now launching their own. Makes sense given Morgan’s massive distribution. Clearly they were seeing meaningful demand from clients for crypto ETFs.”
Ethereum and XRP skipped
While the bank is advancing with Bitcoin and Solana, it has notably bypassed Ethereum and XRP in this filing cycle, a decision that contrasts with recent flow data for those assets.
For context, spot XRP ETFs in the US have demonstrated remarkable consistency, maintaining a “green streak” with zero days of outflows since their launch on Nov. 13. This has driven cumulative inflows past the $1 billion mark in under 2 months.
Meanwhile, the exclusion of Ethereum stands out even more given its market capitalization and rising institutional interest.
Ethereum ETFs have generated inflows of more than $340 million within the first two days of the year, according to SoSo Value data.
These flows follow the funds’ performance in late 2025, when the category saw approximately 18% of its inflows exit the system.
Since peaking at $15 billion before the liquidations on Oct. 10, these funds bled around $2.8 billion.
Consequently, total assets under management for the Ethereum group retracted to roughly $19 billion, down from a high of over $32 billion in early October.
Regardless, institutional interest, as evidenced by this year’s early inflows, remains strong in Ethereum funds.
