Morgan Stanley Swoops into Crypto ETP Market with $7.4 Trillion War Chest

Morgan Stanley has entered the Ethereum and Solana exchange-traded product (ETP) markets, using its massive client assets and low fees to make a significant impact. The firm's two new ETPs, Morgan Stanley Ethereum Trust (MSSE) and Morgan Stanley Solana Trust (MSOL), generated around $38 million in combined trading volume on their first day.

On their first day of trading, MSSE recorded 933,715 shares traded and attracted $5.15 million in net inflows, while MSOL traded 951,216 shares with roughly $19 million in turnover but no net creations. Each product began trading on NYSE Arca at around $20 per share.

Morgan Stanley's new ETPs have undercut several established competitors in fees, with a 0.14% annual sponsor fee and a structure that allows the firm to take no direct share of staking rewards, while custodians and staking providers receive an aggregate 5% of gross rewards. This is a significant advantage for Morgan Stanley, given its massive client base and distribution network.

However, despite the lower fees, Morgan Stanley still has a substantial gap to close against funds that have spent months or years accumulating assets and liquidity. The firm's broader Wealth Management business has $7.4 trillion in client assets and more than 20 million client relationships, which it is leveraging to expand its presence in the crypto market.