Cutting fees to win the next crypto ETF race

Banks are now racing to grab a slice of the next big crypto trend—Ethereum and Solana ETFs. Morgan Stanley just filed plans for two new funds that charge just 0. 14% per year, the lowest among similar products so far. That tiny fee could be a game-changer, since most Ethereum and Solana ETFs charge at least double that amount. But there’s a catch: these filings aren’t final yet. The SEC still has to approve them before trading can begin, and approval isn’t guaranteed. What makes these ETFs stand out isn’t just the low fees. The Ethereum fund plans to stake between 50% and 80% of its holdings, meaning it earns rewards from validating transactions. The Solana fund goes even further, staking up to 100% of its assets while keeping 95% of the rewards for investors. After fees, that could still leave investors with around 5. 83% annual returns on Solana if staking performs as expected. Ethereum’s returns would be lower, around 1. 29% to 2. 14%, but still competitive compared to higher-fee alternatives.Right now, demand for these assets is unpredictable. Some weeks, Solana ETFs see big inflows while Ethereum funds struggle. Other weeks, the opposite happens. Bitcoin still dominates, but advisors are slowly eyeing Ethereum and Solana as possible additions to client portfolios. Morgan Stanley’s low fees could make its products the default choice when advisors finally decide to add crypto exposure beyond Bitcoin. The real battle isn’t just about fees—it’s about capturing advisor attention. With over $1. 8 trillion in assets under management, Morgan Stanley has the reach to push these products into more portfolios. If other firms don’t lower their fees, they risk losing ground to Morgan Stanley’s cheaper options. But if the market doesn’t shift toward Ethereum and Solana soon, these ETFs could struggle to gain traction. There’s also risk in the background. High interest rates make risky assets less attractive, and the SEC could still impose stricter rules on staking or custody before approval. If institutions stay cautious, these ETFs might not see the inflows they need to succeed. Still, if the trend picks up, Morgan Stanley’s early move could give it a long-term advantage in the crypto ETF space.