Ethereum Joins Morgan Stanley’s Suite of Proposed Spot Crypto ETFs

Morgan Stanley is seeking U.S. regulatory approval for a spot Ethereum exchange-traded fund (ETF).

According to a filing submitted Tuesday, the firm registered an S-1 for the proposed Morgan Stanley Ethereum Trust with the U.S. Securities and Exchange Commission (SEC). Specifically, the vehicle is a spot Ethereum ETF to provide investors with direct exposure to the asset.

The filing states that the fund would hold Ethereum directly and track its market price, without engaging in active trading or speculative sales. Notably, the filing also introduces the possibility of generating yield.

For instance, a portion of the fund’s Ethereum holdings may be directed to third-party staking providers. This approach enables the ETF to earn passive returns. The inclusion of staking aligns with broader industry efforts to incorporate yield-bearing features into crypto investment products.

From an operational standpoint, Morgan Stanley Investment Management is the sponsor. Meanwhile, CSC Delaware Trust Company is designated as the Delaware Trustee.

Meanwhile, several key details remain pending. The filing does not yet identify a custodian or specify the exchange on which the ETF would trade, indicating that additional disclosures are likely.

Part of a Broader Wave of Crypto ETF Filings

The Ethereum proposal is part of a wider push into digital assets. Earlier the same day, Morgan Stanley also submitted applications for spot Bitcoin and Solana ETFs.

Taken together, the filings suggest a coordinated strategy to expand exposure across multiple crypto assets within a regulated framework.

Moreover, the ETF push builds on earlier policy changes at the firm. For context, in October 2024, Morgan Stanley began allowing its financial advisors to recommend certain crypto funds.

However, those recommendations were limited to eligible clients and applied to select account types, including IRAs and 401(k)s.

Ethereum ETFs Hold Ground Amid Market Turmoil

The filing arrives amid continued volatility in crypto markets. Despite a roughly $19 billion market correction in October, spot Ethereum ETFs have demonstrated relative resilience.

Bloomberg analyst James Seyffart noted that these products retained the majority of their inflows, with only about 18% of assets exiting from peak levels. Specifically, spot Ethereum ETFs reached approximately $15 billion in cumulative inflows before seeing about $2.8 billion in outflows.

How are US Ethereum ETFs holding up? They’re doing okay considering the price performance of ETH but they’ve seen 18% of their flows leave. They’ve now seen around $2.8 billion in outflows since their peak of $15 billion right before the 10/10 liquidations. pic.twitter.com/SrKGHYHeK7

— James Seyffart (@JSeyff) January 5, 2026

On-Chain Data Reveals Diverging Investor Behavior

Meanwhile, blockchain data points to mixed sentiment among market participants. For instance, Nansen reported that large Ethereum holders increased their exposure over the past week, with whales acquiring approximately $4.83 million worth of ETH across 32 wallets.

In contrast, “smart money” traders reduced their positions, selling roughly $8.9 million in Ethereum across 63 wallets during the same period.

Additionally, new wallet activity suggested continued underlying demand. Wallets created over the past 14 days have accumulated approximately $2.34 billion in spot Ethereum.

According to Nansen, this represents more than a threefold increase in demand among new entrants compared to the previous week. Overall, the trend indicates sustained interest in Ethereum despite broader market uncertainty.

Awaiting SEC Approval 

Finally, the proposed Morgan Stanley Ethereum ETF now awaits review by the SEC. If approved, it would provide another institutional on-ramp for Ethereum exposure in the U.S. market.