Morgan Stanley waded deeper into crypto on July 28, launching two new exchange-traded products — the Morgan Stanley Ethereum Trust (MSSE) and the Morgan Stanley Solana Trust (MSOL). Combined first-day trading volume hit roughly $38 million, with MSSE pulling in $5.15 million in net inflows. The move extends the bank's crypto lineup beyond its existing Bitcoin Trust, which has already accumulated over $400 million in assets.
Underpricing the competition
Both funds charge a 0.14% annual sponsor fee — a rate that undercuts most rivals. Bitwise's BSOL charges 0.20% management fee plus 6% of staking rewards to providers. Grayscale's GSOL takes 0.19% and 7%. Franklin Templeton's SOEZ goes to 8%. On the Ethereum side, Grayscale's lower-cost ETH product charges 0.15% and 6%; BlackRock's ETHB charges 0.25% and 10%. But BlackRock temporarily undercuts Morgan Stanley on ETHB's headline fee via a waiver that drops it to 0.12% on the first $2.5 billion of assets for 12 months starting March. Morgan Stanley's trusts also don't take a direct share of staking rewards — custodians and staking providers get an aggregate 5% of gross rewards.
Staking up to 100% of SOL
MSSE plans to stake between 50% and 80% of its Ethereum holdings under normal market conditions, with a target maximum of 80%. MSOL intends to stake as much as 100% of its SOL, periodically keeping assets unstaked for liquidity. Both funds distribute net staking rewards in cash monthly (at least quarterly) by selling equivalent tokens. That cash distribution model could appeal to institutional investors who prefer not to handle staking mechanics themselves.
The $1.12 billion Solana market
Morgan Stanley's earlier Bitcoin Trust had accumulated over $400 million in assets as of press time. In the Solana space, Bitwise's BSOL has attracted about $892 million in cumulative net inflows — accounting for most of the $1.12 billion in Solana products tracked by Farside. That gives Morgan Stanley a clear benchmark to chase, though its Solana trust saw no net creations on day one despite about $19 million in turnover.
Cash distributions and the fee race
The fee race shows no sign of cooling. BlackRock's temporary waiver on ETHB drops its headline fee to 0.12% on the first $2.5 billion for 12 months, undercutting Morgan Stanley's 0.14% — but only for a limited time. Morgan Stanley's trusts distribute staking rewards in cash monthly, a feature that may appeal to institutional investors seeking simplicity. With 21Shares, Fidelity, and VanEck charging 10%, 15%, and 25% respectively on staking rewards for Solana products, the pressure is on incumbents to justify higher fees.
