This week, Morgan Stanley has intensified its entrance into the cryptocurrency market through a trio of filings with the U.S. Securities and Exchange Commission (SEC). The latest submission, an Ethereum Trust, was filed on Tuesday, following earlier filings for Bitcoin and Solana trusts earlier in the week. This marks the bank's third crypto exchange-traded fund (ETF)-style vehicle proposed within a 48-hour window, underscoring a robust effort to integrate digital assets into its investment products.
The proposed Morgan Stanley Ethereum Trust will function as a passive investment vehicle, sponsored by Morgan Stanley Investment Management. It will hold ether (ETH) directly as its underlying asset and will value its shares daily based on a pricing benchmark derived from leading trading venues. According to reports from Decrypt, the trust plans to stake a portion of its ether holdings, enabling it to earn additional network rewards. These staking rewards are then slated for distribution to shareholders on at least a quarterly schedule, subject to guidance from the Internal Revenue Service (IRS).
This structure is designed to provide investors with the advantage of capturing staking yield while maintaining exposure to ether through a traditional brokerage account. The filing emphasizes that the trust will operate a staking program intended to generate network rewards without compromising the trust’s ability to fulfill redemptions and manage liquidity for shareholders.
The filings coincide with a regulatory environment that, under the administration of President Donald Trump, has become increasingly accommodating toward cryptocurrencies. This regulatory shift has opened pathways for conventional financial institutions like Morgan Stanley to expand ETF offerings tied to digital assets, a market traditionally fraught with regulatory uncertainty.
In a notable expansion of client access, Morgan Stanley extended its crypto fund offerings to all clients in October, including retirement account holders, having previously restricted such investments to high-net-worth individuals. Additionally, the bank collaborated with Zerohash in September to allow trading of Bitcoin, Ethereum, and Solana on its E*Trade platform.
This surge of crypto-related products from Morgan Stanley aligns with broader movements across Wall Street. For example, Bank of America intends to permit wealth advisers to recommend crypto allocations to clients starting in January. Furthermore, December's rule revisions by the Office of the Comptroller of the Currency now allow banks to serve as intermediaries in cryptocurrency transactions, further bridging traditional financial services with the digital asset sector.
The three recent filings from Morgan Stanley include Bitcoin and Solana Trusts alongside the Ethereum Trust. Each is structured as a passive investment vehicle aiming to track the performance of its respective cryptocurrency. The swift succession of these registrations represents a clear strategic pivot, reflecting Wall Street’s accelerating embrace of digital assets.
Ted Pick, Morgan Stanley’s CEO and Chairman, remarked in January 2025 that the institution's approach is contingent upon regulatory clarity and the ability to operate as a regulated transactor. The relatively recent regulatory developments under the Trump administration have evidently expedited this timeline, encouraging the bank to seek approvals for crypto ETFs encompassing the largest cryptocurrencies by market capitalization.
The participation of leading investment firms such as Morgan Stanley, Goldman Sachs, JPMorgan Chase, and Bank of America in launching crypto ETFs simultaneously signifies a significant structural realignment in Wall Street's perception and integration of digital assets. These coordinated moves suggest an intention to normalize cryptocurrency exposure within mainstream financial products, offering investors more accessible avenues for digital asset investment through regulated platforms.
Morgan Stanley’s Ethereum Trust filing highlights the growing acceptance of staking as a feature that enhances product competitiveness in the crypto investment space. By enabling passive yield accrual through staking, the trust offers a unique proposition to investors seeking both price appreciation and income generation from their digital asset holdings.
The approach exemplifies the evolving intersection of traditional financial management and blockchain technology, where conventional investment vehicles are now being adapted to accommodate mechanisms native to decentralized finance protocols.
While Morgan Stanley's filings represent a forward-looking strategy, the success and approval of these ETFs remain subject to regulatory review and IRS guidance, particularly concerning the treatment and distribution of staking rewards.