Morgan Stanley Files Ethereum Staking ETF to Expand Crypto Product Offerings

Morgan Stanley has filed with the US Securities and Exchange Commission (SEC) to launch a spot Ether exchange-traded fund (ETF) that will stake Ether to generate passive income. The filing, made via an S-1 registration statement, marks Morgan Stanley's third crypto ETF initiative, following similar moves for Bitcoin and Solana.

The proposed fund, the Morgan Stanley Ethereum Trust, will hold Ether directly and seek to track its price. It will not engage in speculative selling of the asset but will stake a portion of its holdings through third-party staking providers. This approach aims to generate additional returns from staking rewards, aligning with broader industry trends in Ethereum investment vehicles.

The filing underscores the bank's growing commitment to crypto products. Morgan Stanley recently expanded access to digital assets for its clients through its wealth management arm, indicating a strategic shift to capture institutional and retail demand.

What Does This Mean for Ethereum?

The Ethereum staking component in the ETF could create new demand for Ether, as investors gain exposure to both price appreciation and yield generation. This is consistent with broader market dynamics where Ethereum has increasingly been viewed as a yield-bearing asset.

Morgan Stanley's decision comes amid surging interest in Ethereum-based ETFs. In December 2025, US spot Ethereum ETFs managed $18 billion in assets under management, according to CoinMarketCap. BlackRock, Fidelity, and other major players have also submitted proposals for staking-enabled Ethereum ETFs, though none have yet distributed staking rewards.

How Do These ETFs Differ in Reward Structures?

The proposed Morgan Stanley Ethereum ETF will not directly distribute staking rewards to shareholders. Instead, the rewards will be reflected in the fund's net asset value. This approach contrasts with Grayscale's Ethereum Staking ETF, which distributed $0.08 per share in staking rewards to investors in early January 2026.

The structure of these rewards and their distribution methods could impact investor preferences. Grayscale's decision to issue cash payouts aligns with a strategy of attracting retail investors, while Morgan Stanley's method may appeal more to institutional investors seeking simplicity and integration with traditional fund valuations.

What Are Analysts Watching Next?

Analysts are closely monitoring regulatory developments and investor adoption of these staking-enabled ETFs. The SEC's approval of the Ethereum Trust will determine when the fund can launch, potentially adding another significant demand driver for Ether.

Market data also shows Ethereum ETF inflows remained strong in early 2026, with cumulative inflows reaching $12.67 billion. If this momentum continues, it could reinforce Ethereum's price performance and staking appeal.

Institutional interest in crypto is also growing, as major banks and asset managers continue to expand their offerings. Morgan Stanley's move signals broader acceptance of digital assets within traditional finance.

As these products evolve, investors and regulators will be watching for clarity on staking mechanics, yield expectations, and compliance frameworks. The success of these ETFs could shape the future of Ethereum as both a speculative and income-generating asset.