Morgan Stanley has taken a significant step into the crypto ETF space, filing amended S-1 registration statements for spot Solana and spot Ethereum trusts. The filings, submitted to the SEC, name BNY Mellon and Coinbase Custody as joint custodians and set a 0.14% sponsor fee. The products, which will trade on NYSE Arca under the tickers MSOL and MSSE, also include staking provisions, allowing investors to earn yield on their holdings.
This development marks one of the most direct involvements of a major traditional bank in tokenized fund infrastructure. The 0.14% fee is notably low compared to existing crypto ETFs, potentially pressuring competitors to lower costs. The staking feature adds an income component that could attract yield-seeking institutional capital.
The filings land amid a contested regulatory environment for Ethereum and Solana. The SEC has previously classified Solana as a security in enforcement actions, though recent signals on spot Ethereum ETFs have been more favorable. Industry observers argue that including staking may draw additional scrutiny, since the SEC has questioned whether staked tokens constitute investment contracts.
If approved, the trusts could accelerate institutional adoption. Solana's market cap of roughly $120 billion represents about 5% of the total crypto market, and a spot ETF could broaden access. Bitcoin and Ethereum ETFs have seen $50 billion in combined inflows since January 2024, setting a precedent for Solana products.
Critics caution that the SEC's stance remains unpredictable, especially under current leadership. The proposal's reliance on staking could be challenged, and some community members worry about centralization if custodians control large staked positions. The market awaits the SEC's decision, with analysts split on approval odds.