Morgan Stanley Files for Ethereum ETF: A New Era in Cryptocurrency Investments

Morgan Stanley, the well-known multinational banking giant, has officially submitted an application for an Ethereum exchange-traded fund (ETF). This initiative marks a significant shift in the bank's approach to cryptocurrency, as it aims to provide staking rewards through a structured trust.

Key Takeaways

Morgan Stanley has submitted a filing for an Ethereum ETF designed to provide staking rewards.
Instead of paying out cash dividends, staking rewards will enhance the Trust’s assets.
The Trust will utilize a "Utilization Rate" model to determine staking amounts.
Third-party service providers will manage the staking process, with fees deducted from rewards.
This filing follows similar applications for Solana and Bitcoin, signaling a shift in Morgan Stanley's investment strategy.
The addition of Solana indicates a more aggressive approach by the banking giant, as it is considered a riskier asset.

Morgan Stanley Ethereum ETF

Main Content

Morgan Stanley, a leading multinational banking institution, has officially filed for an Ethereum exchange-traded fund (ETF). This move is particularly noteworthy as the trust is specifically designed to provide staking rewards for its investors.

According to the filing details, the Trust will not distribute staking rewards directly to shareholders as cash dividends. Instead, these rewards will be added to the Trust's assets, which should contribute to an increase in the Net Asset Value (NAV) of the Shares.

It’s important to note that the Trust will not stake all its assets simultaneously. Instead, it will use a "Utilization Rate" model to identify the optimal percentage of assets for staking, which is generally expected to fall within a specific range.

To ensure effective management, Morgan Stanley plans to collaborate with third-party staking service providers who will oversee the technical validation process. The rewards generated will be net of fees paid to these providers, along with a portion retained by the sponsor.

As previously reported by U.Today, Morgan Stanley recently submitted similar applications for both Solana (SOL) and Bitcoin (BTC) earlier this week. This series of filings marks a significant transformation for the banking giant. After consistently offering third-party products from investment firms such as BlackRock and Fidelity, Morgan Stanley is now stepping into the role of a competitor in the cryptocurrency space.

According to Matt Hougan, Chief Investment Officer at Bitwise, this represents a departure from the norm for the bank. Although Morgan Stanley manages more than 20 ETFs, the vast majority operate under its subsidiary brands, such as Calvert, Parametric, and Eaton Vance. Hougan remarked on X, “These will be the 3rd and 4th ETFs to bear the 'Morgan Stanley' brand, which is pretty remarkable.”

The inclusion of Solana within this newfound strategy—alongside Bitcoin and Ethereum—may be the most daring aspect of this initiative. Solana is typically seen as a riskier investment compared to the two more established cryptocurrencies.