Morgan Stanley Files for ETH and SOL ETFs at 0.14%, Undercutting Rivals

Morgan Stanley has amended SEC registration statements for two proposed spot crypto ETFs – the Morgan Stanley Ethereum Trust (ticker: MSSE) and the Morgan Stanley Solana Trust (ticker: MSOL) – setting a 0.14% annual management fee that undercuts Grayscale’s 0.15% and Franklin Templeton’s 0.19%, as the bank applies the same fee-first competitive strategy it used to enter the spot bitcoin ETF market in April 2026.

Fund Mechanics: Staking, Custody, and Benchmark Tracking

Both trusts would trade on NYSE Arca and track CoinDesk benchmark rates – the CoinDesk Ether Benchmark 4PM NY Settlement Rate for MSSE and the CoinDesk Solana Benchmark 4PM NY Settlement Rate for MSOL. BNY and Coinbase Custody would serve as custodians for both products.

The Ethereum trust would stake 50% to 80% of its ether holdings under normal conditions, while the Solana trust may stake up to 100% of its SOL, retaining a portion unstaked to cover redemptions, expenses, and distributions. In both structures, staking providers and custodians receive an aggregate 5% of staking rewards, leaving 95% with the trust. Net rewards would be distributed monthly, but at least quarterly, with no guaranteed amounts disclosed in the filings. For the Solana trust, validator block rewards and transaction fees would not accrue to shareholders.

The filings remain preliminary. Shares cannot be sold until the SEC declares the registration statements effective, and no firm launch dates have been announced.

MSBT as the Template: Fees, Distribution, and Early Performance

Morgan Stanley’s proposed ETH and SOL products follow a playbook already tested with its spot bitcoin fund. The Morgan Stanley Bitcoin Trust (ticker: MSBT) began trading on April 8, 2026, carrying a 0.14% annual management fee that undercut BlackRock’s IBIT at 0.25% and Bitwise’s spot bitcoin ETF at 0.20%. MSBT was the first proprietary spot cryptocurrency ETF launched under the name of a major U.S. commercial bank.

As of July 10, 2026, MSBT traded at $18.47 per share and held approximately $364.23 million in total net assets. Its debut ranked in the top 1% of ETF launches by volume and early adoption – a reference point that makes the bank’s entry into ETH and SOL products commercially coherent rather than speculative.

The bank’s 16,000-strong advisor network represents a distribution advantage that standalone asset managers cannot replicate, and the MSBT launch demonstrated that institutional brand and in-house distribution can translate directly into early fund flows – context worth keeping in mind as the ETH and SOL registrations advance through SEC review.

Fee Compression Signals a Commodity Phase for Crypto ETFs

The 0.14% pricing is narrow enough to read as a competitive signal rather than a standalone decision. Brian Rudick, chief strategy officer at Solana treasury company Upexi and formerly head of research at crypto trading firm and liquidity provider GSR, framed the dynamic on X on July 9: “Issuers don’t compete on price until the product is close to a commodity and the fight is for share, the same compression the spot BTC ETFs went through.”

Rudick added that “SOL ETF AUM already crossed $1B, led by Bitwise’s BSOL, so there is real share to fight over.” That figure establishes that Morgan Stanley is entering a market with measurable assets already committed – not pioneering a new product category, but competing for redistribution of existing capital.

Bitwise launched its Solana ETF, BSOL, on NYSE Arca in October 2025, making it the first U.S.-listed vehicle to provide direct spot SOL exposure. BSOL actively stakes its holdings, with staking rewards contributing to fund returns after applicable expenses – the same structural approach Morgan Stanley is proposing for MSOL, which means fee and yield differential, not product novelty, will determine flows once MSOL launches.

The pattern mirrors what happened in spot bitcoin ETFs after the initial launch wave, where sustained outflow pressure across existing bitcoin ETF products showed that being first to market provides no durable advantage once fee competition intensifies and investor preferences consolidate around a handful of funds. Morgan Stanley appears to have drawn the same conclusion and moved on fee structure accordingly.

The broader ETF market context reinforces the point. Institutional analysis of ETF inflow dynamics has consistently shown that management fee is one of the most durable predictors of long-run AUM capture in commodity-like product categories – which is precisely what Rudick is describing for ETH and SOL products now.

Regulatory Path and What Determines the Outcome

Both filings are structured as S-1 registration statements, meaning they require SEC effectiveness before any shares can trade. The amended filings introduce the 0.14% fee and the custody and staking details; what remains outstanding is the SEC’s decision on whether to declare the registrations effective and, implicitly, whether it accepts the staking mechanics embedded in both trusts.

Staking within an ETF wrapper carries regulatory complexity that pure spot products do not – specifically, questions about whether staking rewards constitute income subject to additional disclosure obligations and whether validator selection creates counterparty risk that must be disclosed to investors. The 5% aggregate fee to staking providers and custodians is disclosed in the filing, but the SEC’s comfort level with those arrangements will shape whether the products launch in their current form or require further amendment.

Franklin Templeton, which is listed at 0.19% for a comparable product, has navigated similar SEC review cycles for multi-asset and single-asset crypto funds. Franklin Templeton’s own ETF product development shows that major institutional issuers are increasingly treating staking and income distribution as standard ETF features rather than experimental add-ons – a posture that may help normalize the mechanics Morgan Stanley is proposing.

What Comes Next

The immediate trigger to watch is SEC effectiveness on the amended registration statements. Once effective, initial flows in the first 30 to 60 trading days will show whether Morgan Stanley’s combination of 0.14% fee, staking income distribution, and bank advisor distribution infrastructure can take share from Bitwise’s BSOL and the existing Grayscale and Franklin Templeton products.

For ETH specifically, the relevant comparison will be against the existing spot ether ETF cohort, where fee differentials and staking inclusion – or exclusion – have already begun to drive AUM divergence. The MSOL product enters a $1B-plus market with a first-mover already entrenched; MSSE enters a market where the fee war has been slower to develop but the same commodity-phase logic applies.

Both trusts remain preliminary offerings. No shares can be sold, and no assets are under management, until SEC effectiveness is granted – a structural gate that prevents any near-term flow comparison with MSBT’s launch performance regardless of market demand signals.

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