Morgan Stanley has filed with the U.S. Securities and Exchange Commission (SEC) to launch an exchange-traded fund (ETF), adding it to the investment banking giant’s growing list of crypto products.
According to Tuesday’s filing, the U.S. investment bank filed an S-1 form to establish the Morgan Stanley Ethereum Trust, an ETF designed to buy, hold and track the spot price of Ether (ETH). KNOT.
The filing states that the fund will not attempt to “speculatively sell” Ether for additional profits, but plans to engage third-party staking providers to stake an undisclosed amount of its holdings for additional passive yield.
The filing is Morgan Stanley’s third for a cryptocurrency ETF, after the bank filed two similar filings on Tuesday, one for the Bitcoin ETF (BTC) and the other for the Solana ETF (SOL).
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Morgan Stanley Investment Management is listed as the ETF sponsor, while CSC Delaware Trust Company is listed as the trustee for the State of Delaware. The S-1 filing does not yet describe the fund’s custodians or the exchange.
The filing signals deeper cryptocurrency ambitions on Morgan Stanley’s part, which will reportedly enable its financial advisors to recommend crypto funds from October 2024 to clients with individual retirement accounts (IRAs) and 401(k)s.
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Spot ETFs Resilient Despite Record $19 Billion Crypto Market Correction
Subject to SEC approval, the novel fund could add another significant source of demand for Ether, given that spot Ether ETFs have shown resilience despite October’s record market crash.
According to James Seyffart, cryptocurrency and ETF analyst at Bloomberg, U.S. spot Ether ETFs have sold only about 18% of their flows from their $15 billion peak, despite Ether’s faint price performance since the $19 billion market crash.
“They have now seen an outflow of approximately $2.8 billion from a peak of $15 billion just prior to the 10/10 liquidation,” X wrote in Monday’s issue. post.
Whales, or enormous cryptocurrency investors, are also increasing their exposure to the Ether spot market, despite widespread selling from top traders in the industry on the basis of returns, which Nansen considers “smart investors.”
According to the crypto intelligence platform, whales bought a total of $4.83 million worth of spot Ether tokens across 32 wallets last week, while shrewd money traders sold $8.9 million across 63 wallets over the same period Nansen.
Still, novel cryptocurrency wallets created in the last 14 days added $2.34 billion worth of Ether spot tokens, signaling a more than threefold augment in demand from novel participants over the past week.
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