Morgan Stanley launches cheapest ETH & SOL staking rewards ETFs
Morgan Stanley Investment Management (MSIM) started trading two crypto ETPs on NYSE Arca on July 28: the Morgan Stanley Ethereum Trust (MSSE) and the Morgan Stanley Solana Trust (MSOL). Both ETH and SOL staking rewards ETFs charge a low 0.14% fee, positioning them as among the cheapest US-listed options for ETH and SOL.
The key design is staking economics: MSIM will not retain any portion of staking rewards. Registration documents show staking targets of 50%–80% of ETH holdings for MSSE and up to 100% of SOL holdings for MSOL. Staking is operationally handled by Figment, Galaxy Blockchain Infrastructure, and Coinbase Canada, while provider service fees are capped at 5%.
The structure also references IRS Revenue Procedure 2025-31 safe harbor to support tax treatment for an ETP staking a single PoS asset and distributing rewards, subject to conditions such as third-party custody of private keys, independent staking providers, and SEC disclosure approval.
Context for traders: MSIM’s earlier Bitcoin fund, the Morgan Stanley Bitcoin Trust (MSBT), also carries a 0.14% fee and reportedly held over $381M AUM by July 16. New benchmarks cited for prior fee lows were Grayscale’s Mini Ethereum Trust (0.15%) and Franklin Templeton’s SOEZ (0.19%).
Trading relevance: tighter ETF fees plus direct ETH/SOL staking rewards distribution could improve yield optics and drive incremental inflows, but downside risks remain from staking mechanics (e.g., validator slashing and lock-ups).
Bullish
Bullish for ETH and SOL because the new MSIM ETH and SOL staking rewards ETFs combine two trader-relevant drivers: very low fees (0.14%) and a clear “no staking yield retained” design that routes staking rewards toward shareholders. That can strengthen relative competitiveness versus prior, higher-fee benchmarks and may attract incremental allocations seeking yield-adjusted exposure. The staking target ranges (50%–80% ETH, up to 100% SOL) increase the likelihood that the product economics will remain meaningfully tied to PoS yield.
Near term, launch optics and fee leadership can support inflows and volatility around first positioning. Over the longer term, if investors value the simplified staking-reward pass-through, this could improve retention and benchmark adoption versus less favorable structures.
Key caveat: staking-related slashing/lock-up risk and operational frictions (reflected in the capped provider fee design) can create drawdown tails, but the market-demand impulse is still likely positive for ETH/SOL given the fee and reward distribution setup.