Morgan Stanley Launches Ethereum and Solana ETFs at 0.14% Fee With Staking Pass-Through

Morgan Stanley debuted spot Ethereum and Solana ETFs on NYSE Arca today, pricing both funds at 0.14% annually and routing 95% of staking rewards directly to investors. The fee is the lowest in the U.S. market for either asset class, and the products are the first Ethereum and Solana ETFs issued by a bank-affiliated asset manager in the United States.

The staking component is the structural detail that separates these funds from prior crypto ETF launches. Bitcoin ETFs, which began trading in January 2024, offered exposure to a proof-of-work asset with no native yield. Ethereum and Solana run on proof-of-stake consensus, meaning validators lock up tokens and earn protocol-level rewards for securing the network. By passing through 95% of that yield, Morgan Stanley is effectively selling a yield-bearing equity-style instrument wrapped in an ETF structure, a product type that has no direct precedent among U.S. bank-issued funds.

Eric Balchunas, senior ETF analyst at Bloomberg Intelligence, said Morgan Stanley is "expanding its ETF offering to launch the biggest yet cheapest Ethereum and Solana ETFs." The 0.14% fee undercuts existing competitors and mirrors the fee compression that followed the January 2024 Bitcoin ETF approvals, when issuers slashed rates within weeks of launch to capture market share. Morgan Stanley is opening at the low end rather than racing down to it.

The 2.5-year gap between the Bitcoin ETF approvals and today's launch reflects the additional regulatory complexity around proof-of-stake assets. The Securities and Exchange Commission spent considerably longer evaluating whether staking mechanisms inside a registered fund structure would constitute a securities offering, and whether in-kind creation and redemption baskets could include staked positions. Today's approval signals the SEC has resolved those questions in favor of the fund structure Morgan Stanley proposed.

The counterarguments are real and worth stating plainly. ETF custody concentrates token holdings with institutional custodians rather than distributing them across individual validators, which critics argue weakens the decentralization thesis underpinning both networks. The 5% staking fee Morgan Stanley retains is a permanent drag on yield relative to self-custody staking, where a validator keeps 100% of rewards minus gas costs. And regulatory approval alone does not move capital: spot Bitcoin ETFs attracted roughly $12.5 billion in net inflows in their first six months, but early optimism about Ethereum ETFs in mid-2024 was followed by months of muted demand before flows accelerated. Institutional appetite for ETH and SOL exposure will be measured in inflow data over the coming weeks, not in today's launch headlines.

What Morgan Stanley's entry does establish is a template. As the first U.S. bank-affiliated issuer in this space, the firm carries distribution reach that pure-play crypto asset managers lack. Morgan Stanley's financial advisors serve approximately 15,000 high-net-worth and institutional client relationships. If even a fraction of those accounts allocate to the new funds, the aggregate effect on staked supply and secondary market demand for both tokens could be material. Ethereum currently has roughly 34 million ETH staked, representing about 28% of total supply. Solana's staking participation rate sits above 65% of circulating supply. Large ETF inflows that route into staking pools would tighten liquid supply further.

Spot Bitcoin ETFs normalized the wrapper. Morgan Stanley's Bitcoin fund success provided the internal business case for expansion. Ethereum and Solana ETFs with staking yields are the logical next product iteration. The question now is which bank-affiliated manager files next, and whether the fee floor of 0.14% holds or gets undercut before the end of the year.