Morgan Stanley Just Undercut Ethereum, Solana ETF Markets

Ethereum and solana exchange-traded funds just got a little cheaper.

Morgan Stanley joined the fray of issuers offering crypto products that track the performance of solana and ethereum late last month after launching a similar bitcoin product in April. The move marks the latest effort by the wirehouse to build up its crypto offerings for coin-crazed clients and could place downward fee pressure on other issuers. The Morgan Stanley products have an expense ratio of just 0.14%, which, among solana products, is several basis points lower than existing offerings from Grayscale and Bitwise, whose Solana staking ETFs have fees of 0.19% and 0.20%, respectively.

“[Morgan Stanley’s new ETFs] do have the lowest fees of the group … It’s very close, but they are still the lowest-fee product,” said Roxanna Islam, head of sector and industry research at TMX VettaFi. “It’s something that’s very appetizing, especially to retail investors who are mindful of fees.”

Last One’s a Rotten Coin

With new crypto offerings, Morgan Stanley, which has often been the first among its wirehouse peers to venture into crypto, is tapping into a huge wealth network to give retail investors access to popular coins. The bank announced last month that some clients can now buy, sell and hold bitcoin, sol and ether via E*Trade, its self-directed brokerage platform. “They have a lot going on in-house where these products can be distributed,” Islam said. “So that’s another huge catalyst for Morgan Stanley to launch these [funds].” The wirehouse’s Bitcoin Trust has already surpassed $400 million in assets, placing it solidly in the largest 15 products despite its relatively recent inception, according to ETF.com data.

Still, the largest solana and ether products on the market belong to Bitwise and iShares, respectively:

• The largest Ethereum fund is the iShares Ethereum Trust (ETHA), which represents roughly $5.5 billion.
• The largest Solana staking ETF currently available in terms of AUM is the Bitwise Solana Staking ETF (BSOL), which oversees approximately $600 million.

New Coin on the Block: Solana ETFs are newer, and therefore smaller than their crypto cousins, Islam said. (The largest has yet to cross the $1 billion threshold.) But Morgan Stanley’s ether product is not the smallest on the market, which is surprising given how recently it launched, she added. And the firm’s bitcoin product has seen inflows this year so far despite major outflows in the currency as a whole.

Some lower-fee products, like the Grayscale Bitcoin Mini Trust (BTC) and the Morgan Stanley Bitcoin Trust (MSBT), have seen inflows, Islam said. “I wouldn’t say they’re going to take the throne away from BlackRock … but I would say that they’re pretty significant products, and they’re making their name in a tough time,” she told ETF Upside.