Morgan Stanley's Big Move into Crypto: What's Next for Ether?

Morgan Stanley is making waves in the crypto world once again. This time, they've filed plans with the US Securities and Exchange Commission (SEC) to launch a spot Ether exchange-traded fund (ETF). This isn't their first foray into crypto, as they've already filed for Bitcoin and Solana ETFs, demonstrating their commitment to the crypto space.

The Morgan Stanley Ethereum Trust

The new ETF, named the Morgan Stanley Ethereum Trust, aims to track the price of Ether (ETH). Unlike some other funds, it won't be selling Ether to generate additional profits. Instead, it plans to use third-party services to stake some of its holdings for passive income. The filing lists Morgan Stanley Investment Management as the sponsor and CSC Delaware Trust Company as the trustee, but the custodians and exchange details remain undisclosed.

Growing Interest in Crypto

This move underscores Morgan Stanley's increasing interest in crypto. They've already allowed their financial advisors to recommend crypto funds to clients with IRAs and 401(k)s since October 2024. If approved, this new ETF could boost demand for Ether, especially as spot Ether ETFs have shown resilience despite the recent market crash.

Market Trends and Investor Behavior

Despite a $19 billion market correction in October, spot Ether ETFs have only seen about 18% of their flows from their peak of $15 billion. Whales, or large investors, have been increasing their spot Ether exposure, while smart money traders have been selling. However, new crypto wallets created in the past 14 days have added $2.34 billion worth of spot Ether, indicating a surge in demand from new entrants.