Morgan Stanley has filed with the U.S. Securities and Exchange Commission (SEC) to launch a spot Ether exchange-traded fund (ETF), adding to the investment banking giant's growing list of crypto products.
According to a filing with the SEC on Tuesday, the US investment bank has filed an S-1 form to ascertain the Morgan Stanley Ethereum Trust, an ETF aimed toward buying, holding and tracking the value of spot Ether (ETH).
The filing states that the fund won’t seek to “speculatively sell” Ether to generate additional returns, but relatively plans to interact third-party staking service providers to stake an undisclosed amount of their holdings for extra passive returns.
The filing marks Morgan Stanley's third cryptocurrency ETF filing, after the bank made two similar filings on Tuesday, one for a Bitcoin (BTC) ETF and one for a Solana (SOL) ETF.
S-1 filing for Morgan Stanley Ethereum Trust. Source: SEC
Morgan Stanley Investment Management was listed because the ETF's sponsor, while CSC Delaware Trust Company acted because the Delaware trustee. The fund's custodians and exchange weren’t yet described within the S-1 filing.
The filing signals deeper crypto ambitions from Morgan Stanley, which has reportedly allowed its financial advisors to recommend crypto funds to clients with individual retirement accounts (IRAs) and 401(k)s starting in October 2024.
Spot Ether ETFs are resilient despite record $19 billion crypto market correction
Pending SEC approval, the brand new fund could represent one other significant source of demand for Ether, considering spot Ether ETFs have proven resilient despite the record market crash in October.
According to James Seyffart, crypto and ETF analyst at Bloomberg, despite Ether's poor price performance because the $19 billion market crash, U.S. spot Ether ETFs sold only about 18% of their inflows from their peak of $15 billion.
“Since peaking at $15 billion just before the ten/10 liquidations, they’ve now seen around $2.8 billion in outflows,” he wrote in a Monday X post.
Source: James Seyffart
Whales, or large cryptocurrency investors, have also increased their spot Ether exposure, despite the widespread presence of the industry's top traders by return, what Nansen calls “smart money” traders.
According to crypto intelligence platform Nansen, whales purchased a complete of $4.83 million in spot Ether tokens in 32 wallets last week, while smart money traders sold $8.9 million in 63 wallets through the same period.
ETH/USD, one-year chart, token god mode. Source: Nansen.ai
Still, newly created cryptocurrency wallets have added $2.34 billion value of spot Ether tokens previously 14 days, signaling a greater than three-fold increase in demand from latest market entrants over the past week.
