Morgan Stanley has filed with the US Securities and Exchange Commission (SEC) to launch a spot Ether exchange-traded fund (ETF), adding to a growing list of crypto products from the investment banking giant.
The US investment bank filed an S-1 form to establish the Morgan Stanley Ethereum Trust, an ETF that seeks to buy, hold and track the price of spot Ether (ETH), according to a Tuesday filing with the SEC.
The filing states that the fund will not seek to “speculatively sell” Ether to realize additional returns, but it plans to engage third-party staking services providers to stake an undisclosed amount of their holdings for additional passive yield.
The filing is Morgan Stanley’s third cryptocurrency ETF filing, after the bank made two similar filings on Tuesday, one for a Bitcoin (BTC) ETF and another for a Solana (SOL) ETF.
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Morgan Stanley Investment Management was listed as the sponsor of the ETF, while CSC Delaware Trust Company appears as the Delaware trustee. The fund’s custodians and exchange were not yet described in the S-1 filing.
The filing signals deeper crypto ambitions from Morgan Stanley, which reportedly enabled its financial advisers to recommend crypto funds starting in October 2024, to clients with individual retirement accounts (IRAs) and 401(k)s.
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Spot Ether ETFs resilient despite record $19 billion crypto market correction
Subject to the SEC’s approval, the new fund could add another meaningful source of demand for Ether, considering that spot Ether ETFs have been resilient despite the record October market crash.
US spot Ether ETFs only sold about 18% of their flows from their peak of $15 billion, despite Ether’s poor price performance since the $19 billion market crash, according to James Seyffart, crypto and ETF analyst at Bloomberg.
“They’ve now seen around $2.8 billion in outflows since their peak of $15 billion right before the 10/10 liquidations,” he wrote in a Monday X post.
Whales, or large cryptocurrency investors, have also been increasing their spot Ether exposure, despite widespread selling from the industry’s best traders by returns, tracked as “smart money” traders by Nansen.
Whales bought a cumulative $4.83 million spot Ether tokens across 32 wallets during the past week, while smart money traders sold $8.9 million across 63 wallets in the same period, according to crypto intelligence platform Nansen.
Still, fresh cryptocurrency wallets created over the past 14 days have added $2.34 billion worth of spot Ether tokens, signaling an over threefold demand increase from new entrants during the past week.
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