After BlackRock's $150 billion success, Morgan Stanley registers investment products in Bitcoin and Solana

Source: Yellow Original Title: After BlackRock’s $150 trillion success, Morgan Stanley registers Bitcoin and Solana investment products

Original Link: Morgan Stanley has taken a further step into digital assets by filing applications to launch investment products linked to Bitcoin and Solana, indicating that the Wall Street bank is moving beyond exploratory exposure and advancing toward direct participation in the rapidly growing cryptocurrency fund market.

The regulatory documents filed on Tuesday show that the firm has applied to create a Bitcoin Trust and a Solana Trust, each designed to hold the underlying cryptocurrency on behalf of investors.

According to the documents, the proposed products would be sponsored by Morgan Stanley Investment Management.

The Solana vehicle would include a staking component, allowing a portion of holdings to earn rewards by supporting the operations of the blockchain network, a structure reflecting the growing institutional interest in yield-generating crypto strategies beyond simple price exposure.

This move marks Morgan Stanley’s most direct entry so far into exchange-traded products focused on cryptocurrencies, approximately two years after crypto ETFs listed in the U.S. broke into the mainstream following regulatory approvals in early 2024.

Traditional finance accelerates its crypto bet

Morgan Stanley’s filings come as traditional financial institutions continue to expand their capabilities in digital assets.

Firms like Goldman Sachs, JPMorgan Chase, and Citigroup have increased their institutional activity in crypto, launching trading desks and testing custody, settlement, and blockchain-based tokenization services.

According to Bloomberg data, there are currently over one hundred fifty billion dollars invested in around one hundred thirty crypto-related funds in the United States.

Most of these assets are concentrated in products focused on Bitcoin, many of which were launched in January 2024 and quickly attracted significant inflows.

Market participants note that issuers with integrated advisory platforms face increasing pressure to offer crypto exposure as client demand becomes harder to ignore.

Todd Sohn, senior ETF strategist at Strategas Securities, said the expansion reflects broader acceptance of cryptocurrencies within traditional portfolios, comparing it to recent decisions by firms like Vanguard and Bank of America to allow limited crypto allocations.

He pointed out that rarely do entirely new asset classes enter the ETF ecosystem, making the pace of institutional adoption particularly notable.

Bitcoin leads while altcoin funds face headwinds

Bitcoin remains the dominant force in the cryptocurrency fund market.

More than ten Bitcoin-only investment products are already listed in the U.S., along with a smaller number of offerings linked to Solana, the sixth-largest digital asset by market capitalization.

While flagship Bitcoin funds, including BlackRock’s IBIT, have attracted billions of dollars, demand for more specialized products linked to smaller or less established tokens has been uneven.

Many niche crypto funds have struggled to generate significant inflows despite broader market enthusiasm.

Morgan Stanley itself remains a relatively small player in the ETF business.

Bloomberg Intelligence data shows that the firm is not among the top ten ETF issuers by assets, lagging behind new entrants like Neos Investments, launched in 2022.

The existing range of the bank’s ETFs has historically focused on traditional equity and fixed-income strategies.

A broader crypto strategy takes shape

Despite its modest presence in ETFs, Morgan Stanley has been steadily laying the groundwork for a larger role in digital assets.

In September last year, Morgan Stanley partnered with a crypto infrastructure provider to enable E*Trade clients to trade major tokens starting in 2026.

The bank has also explored launching a dedicated crypto asset allocation strategy and evaluating broader applications of tokenization in financial products.