Morgan Stanley Leverages $7.4 Trillion in Client Assets to Expand Crypto ETF Offerings

Morgan Stanley’s new Ethereum and Solana exchange‑traded products generated roughly $38 million in combined trading volume on their first day, giving the firm an immediate presence in two crypto‑fund markets that were previously dominated by earlier entrants.

The Morgan Stanley Ethereum Trust (MSSE) recorded 933,715 shares traded on Tuesday and attracted $5.15 million of net inflows. The Morgan Stanley Solana Trust (MSOL) traded 951,216 shares, producing roughly $19 million of turnover but no net creations. Both products began trading on NYSE Arca at approximately $20 per share.

Data from SoSoValue indicates that the inflows into MSSE accounted for more than one‑third of the roughly $14.5 million that entered U.S. Ethereum funds during the session. BlackRock’s staking‑enabled ETHB attracted $5.9 million, while its larger ETHA product added $3.5 million.

In contrast, the Solana market moved in the opposite direction, with the existing fund group losing $18.1 million as investors withdrew the full amount from Bitwise’s BSOL.

These differing debuts provide an early gauge of how much market share Morgan Stanley can capture after entering the categories later than competitors. While MSSE converted a sizable portion of its first‑day trading into new assets, MSOL generated comparable secondary‑market activity during a session when investors were reducing exposure to the broader Solana fund complex.

Morgan Stanley Investment Management launched the two products on July 28 as an extension of its crypto lineup that began with the Morgan Stanley Bitcoin Trust in April.

As of the latest press report, MSBT had amassed more than $400 million in assets despite entering a Bitcoin‑fund market already led by BlackRock and Fidelity.

The new products also extend Morgan Stanley beyond simple spot exposure, allowing the trusts to stake their underlying assets and compete directly in the growing competition for yield generation among fund issuers.

Morgan Stanley undercuts rivals on fees

Morgan Stanley is entering that competition with one of the lowest combinations of management and staking fees available in either market.

Both MSSE and MSOL carry an annual sponsor fee of 0.14%. Morgan Stanley will not retain any direct share of staking rewards; custodians and staking providers are expected to receive an aggregate 5% of gross rewards, with the remainder retained by the trusts before distributions and applicable expenses.

This structure undercuts several established competitors.

In the Solana space, Bitwise’s BSOL charges a 0.20% management fee and passes 6% of staking rewards to service providers. Grayscale’s GSOL charges 0.19% and surrenders 7%, while Franklin Templeton’s SOEZ takes 8% of staking rewards. Staking cuts climb to at least 10% at 21Shares, 15% at Fidelity and 25% at VanEck, according to Farside Investors data.

The Ethereum market shows a similar pattern, Farside data indicates. Grayscale’s lower‑cost ETH product carries a 0.15% management fee and a 6% staking charge, whereas BlackRock’s ETHB lists a 0.25% sponsor fee and gives up 10% of staking rewards.

Staking charges for 21Shares’ TETH and Grayscale’s larger ETHE stand at 25% and 23%, respectively.

BlackRock temporarily undercuts Morgan Stanley on ETHB’s headline management cost through a waiver that reduces its fee to 0.12% on the first $2.5 billion of assets for 12 months beginning in March; its standard rate remains 0.25%.

Morgan Stanley’s challenge therefore extends beyond a conventional ETF fee war. For staking products, investor returns also depend on how much of the portfolio participates in the network and on how much of the resulting reward is retained by intermediaries.

Under normal market conditions, MSSE plans to stake between 50% and 80% of its Ethereum holdings, with 80% set as the target maximum while allowing the amount to vary with redemption needs, network withdrawal times and market liquidity.

MSOL takes a more aggressive stance, intending to stake up to 100% of its SOL holdings, while periodically holding assets unstaked to meet expected redemptions and other liquidity requirements.

Both funds plan to distribute net staking rewards in cash on a monthly basis, with at least quarterly distributions. Rewards accrue in ETH or SOL before the trusts sell an equivalent amount of tokens to fund shareholder payouts.

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