Morgan Stanley is using $7.4 trillion in client assets and rock-bottom fees to hijack Wall Street’s crypto boom
Morgan Stanley’s new Ethereum and Solana exchange-traded merchandise generated roughly $38 million in mixed buying and selling quantity on their first day, giving the Wall Street agency a direct presence in two crypto fund markets dominated by earlier entrants.
The Morgan Stanley Ethereum Trust (MSSE) recorded 933,715 shares traded Tuesday and attracted $5.15 million of internet inflows. The Morgan Stanley Solana Trust (MSOL) traded 951,216 shares, producing roughly $19 million of turnover however no internet creations. Each product started buying and selling on NYSE Arca at round $20 per share.
Data from SoSoValue exhibits that the MSSE’s inflows represented greater than a 3rd of the roughly $14.5 million that entered US ETH funds in the course of the session. BlackRock’s staking-enabled ETHB drew $5.9 million, and its bigger ETHA product added $3.5 million.
Meanwhile, the Solana market moved in the wrong way, with the present fund group shedding $18.1 million as buyers pulled your complete quantity from Bitwise’s BSOL.
The contrasting debuts present an early check of how a lot market share Morgan Stanley can seize after getting into each classes late. MSSE transformed a large portion of its first-day buying and selling into new assets, whereas MSOL drew comparable secondary-market exercise throughout a session when buyers had been lowering publicity to the broader Solana fund advanced.
Morgan Stanley Investment Management launched the 2 merchandise July 28 as an extension of a crypto lineup that started with the Morgan Stanley Bitcoin Trust in April.
MSBT had collected greater than $400 million in assets as of press time regardless of getting into a Bitcoin fund market already led by BlackRock and Fidelity.
The new merchandise additionally push Morgan Stanley past easy spot publicity. Both can stake their underlying assets, putting the agency straight right into a rising competitors over how a lot yield fund issuers return to buyers.
Morgan Stanley undercuts rivals on fees
Morgan Stanley is getting into that battle with one of many lowest combos of administration and staking expenses obtainable in both market.
MSSE and MSOL every carry a 0.14% annual sponsor price. Morgan Stanley will even take no direct share of their staking rewards, whereas custodians and staking suppliers are anticipated to obtain an combination 5% of gross rewards. The the rest is retained by the trusts earlier than distributions and relevant bills.
That construction undercuts a number of established rivals.
In Solana, Bitwise’s BSOL expenses a 0.20% administration price and passes 6% of staking rewards to service suppliers. Grayscale’s GSOL expenses 0.19% and offers up 7%, whereas Franklin Templeton’s SOEZ takes 8% of staking rewards. Staking cuts rise to at the least 10% at 21Shares, 15% at Fidelity and 25% at VanEck, Farside Investors data present.
The ETH market has an identical unfold, Farside knowledge shows. Grayscale’s lower-cost ETH product carries a 0.15% administration price and a 6% staking cost, whereas BlackRock’s ETHB has a acknowledged 0.25% sponsor price and offers up 10% of staking rewards.
The staking expenses on 21Shares’ TETH and Grayscale’s bigger ETHE product stand at 25% and 23%, respectively.
BlackRock quickly undercuts Morgan Stanley on ETHB’s headline administration value by a waiver that lowers its price to 0.12% on the primary $2.5 billion of assets for 12 months starting in March. Its normal price stays 0.25%.
Morgan Stanley’s problem due to this fact extends past a standard ETF price battle. For staking merchandise, investor returns additionally rely upon how a lot of the portfolio participates in the community and how a lot of the ensuing reward is retained by intermediaries.
MSSE plans underneath regular market situations to stake between 50% and 80% of its Ethereum holdings. Its prospectus units 80% because the goal most whereas permitting the quantity to fluctuate with redemption wants, community withdrawal occasions and market liquidity.
MSOL is extra aggressive. The belief intends to stake as a lot as 100% of its SOL, whereas periodically holding assets unstaked to meet anticipated redemptions and different liquidity necessities.
Both funds intend to distribute internet staking rewards in money month-to-month, however at the least quarterly. Rewards accrue in ETH or SOL earlier than the trusts promote an equal quantity of the tokens to fund distributions to shareholders.
That method offers buyers entry to staking revenue by a standard brokerage product with out requiring them to custody tokens or work together straight with validators.
Distribution assessments the incumbents’ head begin
Despite the decrease prices, Morgan Stanley nonetheless has a considerable hole to shut towards funds which have spent months or years accumulating assets and liquidity.
Bitwise’s BSOL has attracted about $892 million of cumulative internet inflows, accounting for many of the roughly $1.12 billion collected throughout the Solana merchandise tracked by Farside.
BlackRock’s original ETHA product has drawn about $11.4 billion, whereas its newer staking-enabled ETHB has already attracted roughly $529 million.
Those balances give the incumbent merchandise deeper buying and selling histories and established investor bases, benefits {that a} decrease price doesn’t instantly erase.
However, Morgan Stanley brings a unique benefit.
Bloomberg Intelligence analyst Eric Balchunas described the brand new merchandise as probably the most vital additions to the ETH and Solana ETF markets since their preliminary launch, citing Morgan Stanley’s dimension and attain. The agency has virtually 16,000 monetary advisers overseeing about $2.6 trillion in mixed client assets.
Its broader Wealth Management enterprise ended 2025 with $7.4 trillion in client assets and greater than 20 million client relationships.
Morgan Stanley has additionally recognized crypto and tokenization among the many product capabilities it intends to broaden as extra prospects transfer between its E*TRADE, office and adviser-led channels.
The agency has been constructing the infrastructure round these ambitions. E*TRADE accomplished the rollout of direct Bitcoin, Ethereum and SOL buying and selling earlier this month, whereas Morgan Stanley has additionally created a referral arrangement with Galaxy Digital that permits eligible wealth shoppers to convert crypto publicity into shares of spot ETPs.
That distribution community offers MSSE and MSOL a route to buyers past the crypto-native viewers that helped set up lots of their rivals.
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