Morgan Stanley Sets Record Low Fees for Ethereum and Solana ETFs

Morgan Stanley has significantly updated its spot Ethereum and Solana exchange-traded fund (ETF) applications, setting a record-low sponsor fee of 0.14% for both funds. This strategic move positions the investment bank as a cost leader in the cryptocurrency market, potentially offering the cheapest Ethereum and Solana ETFs in the U.S. and globally. According to Bloomberg ETF analyst Eric Balchunas, this pricing strategy is expected to intensify competition within the market.

The amended S-1 registration statements, submitted to the U.S. Securities and Exchange Commission (SEC) on June 18, 2026, indicate ongoing progress in Morgan Stanley's efforts to launch these products. These revisions mark the second round of amendments since the initial applications were filed in January 2026, signaling active communication between the bank and regulators. The 0.14% fee undercuts existing low-cost competitors, including Grayscale's Mini Ethereum Trust at 0.15% and Franklin Templeton's Solana ETF at 0.19%. Morgan Stanley adopted a similar strategy with its Bitcoin Trust (MSBT), launched in April 2026 with the same 0.14% fee, which has attracted cumulative net inflows of $300.7 million as of June 18, 2026.

The new filings also detail plans to incorporate staking mechanisms for the underlying assets. A portion of the Ethereum and Solana holdings within each fund will be staked to generate additional returns for investors. Prominent staking service providers, including Figment Inc., Galaxy Blockchain Infrastructure LLC, and Coinbase Canada Inc., have been named to support these operations. Of the staking rewards generated, 95% will be directly passed through to fund shareholders, while the remaining 5% will cover fees for the service providers and custodians. This mechanism offers investors the opportunity to earn passive income in addition to potential gains from asset price movements.

These low-cost, staking-enabled ETFs have the potential to significantly intensify competition in the cryptocurrency market. Morgan Stanley's adoption of such an aggressive pricing strategy could compel other fund providers to reduce their fees. This development could make access to crypto assets more appealing, particularly for institutional investors and financial advisors, thereby contributing to broader market adoption.

This initiative is viewed as a key part of Morgan Stanley's broader expansion strategy into the digital asset space. Following the successful launch of its Bitcoin Trust, the bank aims to solidify its leadership in this sector by offering similar products for other high-market-cap cryptocurrencies like Ethereum and Solana. The ongoing and active regulatory approval processes are generally seen as a positive indicator for the future of digital asset ETFs.

Analysts suggest that Morgan Stanley's move could trigger a "fee war" in the market. While active dialogue with the SEC is underway, regulatory approval is still pending for the official launch of these funds. It is also anticipated that the staking mechanisms, in particular, may undergo closer scrutiny from the SEC, potentially leading to further adjustments during the approval process. Nevertheless, these developments are expected to pave the way for wider access to Ethereum and Solana through traditional financial channels.