Morgan Stanley Files S-1s for Bitcoin and Solana ETFs as Wall Street Crypto Push Accelerates

Morgan Stanley has filed registration statements with the SEC for spot Bitcoin and Solana exchange-traded funds, marking another major Wall Street institution’s expansion into regulated crypto products. The dual filings landed Tuesday as institutional demand for digital asset ETFs continues climbing in early 2025.

The investment banking giant’s move comes as asset managers rush to capture what multiple fund executives describe as “clean-slate” investing behavior. January typically drives portfolio rebalancing and fresh capital allocation, creating a natural window for launching new investment vehicles.

Wall Street’s Crypto ETF Arms Race Intensifies

Morgan Stanley’s S-1 filings represent the firm’s most direct push into spot crypto ETFs yet. While the bank already offers Bitcoin ETF access to its 15,000 financial advisors through products from BlackRock and Fidelity, launching proprietary funds would let Morgan Stanley capture management fees rather than simply distribute competitors’ products.

That matters because the Bitcoin ETF market has exploded past $100 billion in combined assets since spot products launched in January 2024. BlackRock’s IBIT alone holds over $50 billion, generating hundreds of millions in annual fees at a 0.25% expense ratio.

Morgan Stanley’s Solana filing is more aggressive. Only one spot SOL ETF has launched in the U.S. so far, giving early movers potential market dominance if the SEC approves multiple applications simultaneously. VanEck, 21Shares, Canary Capital, and Grayscale have all filed for Solana ETFs, but none have cleared regulatory hurdles yet.

Solana trades around $190 after surging over 90% in the past three months. Network activity has jumped alongside price, with daily active addresses hitting multi-month highs as memecoins and DeFi protocols drive usage.

Regulatory Clarity Remains Murky Despite Filing Surge

SEC approval for Solana ETFs isn’t guaranteed. Chair Gary Gensler repeatedly classified most cryptocurrencies beyond Bitcoin as securities during his tenure, which ended in January. His replacement hasn’t been confirmed yet, leaving regulatory policy in flux.

Bitcoin ETFs sailed through approval because the SEC already allowed Bitcoin futures ETFs and accepted the commodity status the CFTC assigned BTC. Solana lacks that regulatory foundation. Either the new SEC leadership signals openness to altcoin ETFs quickly, or these applications face months of back-and-forth amendments and potential rejections.

Morgan Stanley’s timing suggests the bank expects faster approvals under new leadership. Filing S-1s requires substantial legal and compliance resources. Firms don’t burn that capital unless they see a genuine path to launch.

Competitor filings support that read. Grayscale, which successfully converted its Bitcoin trust to an ETF after suing the SEC, filed for Solana ETF conversion in October. Franklin Templeton and Bitwise have explored similar products. When multiple sophisticated institutions move simultaneously, they’re typically responding to shared information about regulatory winds shifting.

Investor Demand Drives Product Innovation

The “clean-slate effect” Morgan Stanley cited in its filing rationale reflects real trading patterns. Asset managers consistently report higher inflows during January as investors rebalance portfolios and deploy bonuses or year-end savings.

Crypto ETFs captured over $2 billion in net inflows during the first two weeks of January alone, according to preliminary data from multiple fund trackers. Bitcoin ETFs dominated that figure, but Ethereum ETFs saw accelerating interest after stagnating through late 2024.

Solana’s inclusion in Morgan Stanley’s filing strategy acknowledges the token’s specific appeal to investors seeking higher-risk, higher-reward exposure beyond Bitcoin’s relative stability. SOL has outperformed BTC and ETH over multiple timeframes, attracting growth-focused allocators.

Whether retail investors actually want Solana ETFs at scale remains untested. Ethereum ETFs launched to massive fanfare but collected just $12 billion in assets compared to Bitcoin’s $100 billion-plus. Altcoin appetite may not translate from crypto-native traders to regulated fund buyers.

What Comes Next for Morgan Stanley’s Crypto Ambitions

Watch the SEC’s response timeline. Bitcoin ETF approvals moved quickly once the agency decided to allow them, with multiple products launching simultaneously. Solana could follow that pattern or face extended review.

Morgan Stanley’s Bitcoin ETF filing should clear easily given the established precedent. Launch timing depends on SEC processing speed and whether the bank wants to coordinate both products or stagger releases.

The bigger question is whether Morgan Stanley stops at Bitcoin and Solana ETFs or uses these filings as templates for additional altcoin products. XRP