Key highlights:

  • Morgan Stanley filed updated S-1 documents for its Ethereum and Solana ETFs
  • The Ethereum ETF would stake at least 50% of its holdings, while the Solana ETF may stake up to 100%
  • James Seyffart said the filings suggest its launch could be soon

Morgan Stanley has taken another step toward the launch of its spot Ethereum and Solana ETFs. In an update on Tuesday, the firm submitted new documents to support its current filing with the SEC to bring these funds to the market. The updates come just months after the firm launched its Bitcoin ETF, looking to compete with BlackRock and other top ETFs.

Morgan Stanley updates Ethereum and Solana ETF filings

New filings submitted to the SEC on Tuesday showed that Morgan Stanley has made a third amendment to its proposed spot Ethereum ETF and its Solana ETF. The Ethereum fund is expected to trade on NYSE Arca under the ticker MSSE. The Solana fund would trade under MSOL.

The firm made changes regarding custody and staking arrangements in the new filing. Coinbase Prime will be key to the fund’s trade execution and custody services. The Bank of New York Mellon and Coinbase Custody will be custodians for the Ethereum product. 

Additionally, the proposed Ethereum ETF intends to stake between 50% and 80% of its Ether holdings under normal market conditions. 

Meanwhile, the Solana ETF could stake up to 100% of its SOL holdings, while keeping enough to handle redemptions and operational needs. Staking providers and custodians would receive 5% of staking rewards. Investors would receive the remaining 95%.

Bloomberg ETF analyst James Seyffart said the latest amendments suggest the launch is “pretty close.”

Low fees could help win market share

Experts have highlighted that the fund’s low fees could bring in more investors. Both ETF products carry a sponsor fee of 0.14%. This makes them among the cheapest crypto ETFs in the United States.

The low-cost strategy has now become a trend for the firm. Morgan Stanley had earlier launched its Bitcoin Trust (MSBT) with the same 0.14% fee structure. The fund has attracted over $380 million in inflows, according to SoSoValue data.

MSBT ETF Flows

MSBT ETF inflows. Source: SoSoValue

Now the company appears to be using the same method to gain market share in Ethereum and Solana products.

The bank also suggests Bitcoin exposure in a portfolio ranging from 0%-2% for certain portfolios, while other aggressive portfolios have 2%-4%.

Strategy’s “Bitcoin Banking Adoption Index” ranks Morgan Stanley at 43%. It is ranked at an elite level among banking institutions that are adopting Bitcoin.

The new funds from Morgan Stanley would include staking, which could provide an additional source of returns. The Ethereum ETF would use services from staking providers like Figment, Galaxy Blockchain Infrastructure, and Coinbase Canada. Similar arrangements are also expected for the Solana fund.

Since January, the company has submitted multiple amendments, with new revisions arriving in June and now in July. Although approval has not yet been granted, repeated updates mean regulators are actively reviewing an application.

In other developments, Morgan Stanley is preparing to report its second-quarter earnings on July 15. Analysts are expecting earnings per share of $2.89 and revenue of about $19.67 billion.