Morgan Stanley and Grayscale Push Crypto ETF Expansion with Bitcoin, Ethereum, and Solana Filings

Morgan Stanley has filed a registration statement with the U.S. Securities and Exchange Commission (SEC) for a spot Bitcoin ETF, the first major U.S. bank to seek approval for such a product. The fund, called the Morgan Stanley Bitcoin Trust, would directly hold Bitcoin rather than derivatives or futures. This move aligns the bank with major asset managers like BlackRock and Fidelity that have already launched spot Bitcoin ETFs.

The proposed ETF is structured to track Bitcoin's price net of fees and expenses, with shares redeemable in large blocks by authorized participants. The fund's net asset value would be calculated using a pricing benchmark based on activity across major Bitcoin exchanges. Retail investors will trade the shares on a secondary market through standard brokerage accounts.

Grayscale has also updated its product lineup to include staking features. The Grayscale Ethereum Staking Mini ETF, formerly known as Grayscale Ethereum Mini Trust ETF, has changed its legal name to reflect its inclusion of staking rewards. This marks a growing trend in the crypto ETF space, where products are increasingly integrating blockchain-based income generation.

Why Did This Happen?

The push into crypto ETFs by Morgan Stanley and Grayscale reflects broader institutional confidence in regulated digital assets. U.S. banks have traditionally limited their role to custody and brokerage services, but recent regulatory clarity has opened the door for direct product issuance. In December, the Office of the Comptroller of the Currency allowed banks to act as intermediaries for crypto transactions, helping to narrow the divide between traditional and digital markets according to reports.

Morgan Stanley’s entry into the space also underscores the economic incentives for large institutions. Spot Bitcoin ETFs have become one of the fastest-growing products in the U.S. ETF industry, with significant inflows even during periods of price volatility. For example, BlackRock's Bitcoin ETF became a top revenue generator for the firm within its first year.

How Did Markets React?

The filing by Morgan Stanley has been met with positive sentiment, particularly given the continued growth in the spot Bitcoin ETF market. These funds now manage more than $120 billion in assets, representing a meaningful share of Bitcoin's total market capitalization.

Meanwhile, the Ethereum staking ETFs have also seen resilience despite a broader market correction. Spot Ether ETFs have only lost about 18% of their flows from their peak of $15 billion, according to Bloomberg analyst James Seyffart. This suggests that institutional investors remain committed to Ethereum, even when the price is under pressure.

Grayscale's announcement of a staking rewards distribution for its Ethereum Staking ETF marks a first in the U.S. market. Shareholders will receive about $0.08 per share in cash from the sale of staking rewards, a move that differentiates Grayscale's product from others that might distribute rewards in Ether.

What Are Analysts Watching Next?

Regulatory developments remain a key factor for the success of these new offerings. Morgan Stanley’s Ethereum ETF filing includes a staking component but does not distribute rewards directly to shareholders. Instead, the fund incorporates those rewards into its net asset value. This structure differs from some other Ethereum-focused products and may influence investor preference.

Analysts are also watching how the broader regulatory landscape evolves. In December, the Office of the Comptroller of the Currency allowed banks to engage in crypto intermediation, and the SEC has adjusted its listing standards for spot crypto ETFs. These changes are seen as steps toward a more integrated financial system that includes digital assets.

Additionally, there are questions about how these products will perform in a broader market. For instance, Morgan Stanley has also filed for a Solana ETF, which has attracted over $1 billion in assets since its launch. However, Solana ETFs have drawn less capital compared to Bitcoin and Ethereum-focused products, raising questions about investor demand for altcoins.

Goldman Sachs, in a separate report, highlighted the importance of regulatory clarity in driving the next wave of institutional crypto adoption. According to the bank, 35% of institutions cited regulatory uncertainty as the biggest hurdle to adoption, while 32% see regulatory clarity as the top catalyst. This suggests that continued policy developments could unlock further capital inflows into the sector.

The market is also closely watching how existing crypto ETFs perform in 2026. The U.S. spot crypto ETF market has grown rapidly since 2024, with cumulative volumes surpassing $2 trillion. The success of these funds will likely influence how other institutions approach crypto investment products in the coming year.