Morgan Stanley Launches Low-Fee Ether and Solana ETFs

Morgan Stanley Investment Management began trading two exchange-traded products on July 28, giving investors indirect exposure to ether and SOL through standard brokerage accounts. The Morgan Stanley Ethereum Trust, trading as MSSE, and the Morgan Stanley Solana Trust, trading as MSOL, launched on NYSE Arca with an expense ratio of 0.14% each.

A Third Digital-Asset Product Line for Morgan Stanley

MSSE tracks ether using the CoinDesk Ether Benchmark 4pm NY Settlement Rate, while MSOL follows the equivalent CoinDesk benchmark for SOL. Both funds join the Morgan Stanley Bitcoin Trust, which held more than $381 million in assets under management as of July 16, bringing Morgan Stanley's total exchange-traded product lineup to more than $14 billion across 22 funds, including three tied to digital assets.

The launch lands as institutional demand stays sensitive to pricing and flows, with Bitcoin recently recovering despite heavy ETF outflows underscoring how closely investors track fund-level moves.

Staking Rewards Flow to Investors, Not Morgan Stanley

Both trusts intend to stake portions of their holdings to earn blockchain rewards, and Morgan Stanley Investment Management says it will keep none of those rewards for itself. Regulatory filings show MSOL may stake up to 100% of its SOL holdings under normal conditions, though the trust can hold assets unstaked to cover redemptions, expenses and liquidity needs.

Figment, Galaxy Blockchain Infrastructure and Coinbase Canada are named as staking service providers for the Solana trust, and their fees will reduce the rewards that ultimately reach investors. The structure reflects a broader trend of institutions building around proof-of-stake networks, following moves such as MoneyGram's entry into Solana validator infrastructure.

A Federal Tax Rule Made the Structure Possible

Revenue Procedure 2025-31 created a federal tax safe harbor letting qualifying investment and grantor trusts stake proof-of-stake assets without losing their trust classification. The rule does not make staking income tax-free, and rewards may still create taxable income for individual shareholders depending on their circumstances.

The launch also lands as lawmakers continue debating a broader US regulatory framework for digital assets, a process that will shape how far issuers can go in building staking-linked products going forward.

Risks Investors Should Weigh

MSSE and MSOL offer indirect exposure rather than direct ownership of ether or SOL, meaning investors hold no private keys and do not interact with either blockchain themselves. They remain exposed to cryptocurrency volatility, tracking differences, liquidity constraints, custodian failures and staking-specific risks such as validator penalties or slashing. Morgan Stanley warns that investors could lose their entire investment in either product.