The 0.14% rate hit, and Damo set off a crypto ETF price war

Woofun AI learned that Morgan Stanley (MS.US) officially launched the Ethereum ETF and Solana ETF, entering the competitive crypto fund circuit with an extremely aggressive 0.14% comprehensive rate, in an attempt to reshape the industry's pricing logic through a fully staked earnings retention mechanism.

Trading data from the first day of listing revealed significant differentiation in capital flows. Morgan Stanley Ethereum Trust (MSSE) (MSSE.US) was listed on the New York Stock Exchange Arca Exchange at an opening price of about $20 per share. 933,715 shares were traded on the same day, attracting a net inflow of 5.15 million US dollars;

Meanwhile, Morgan Stanley's Solana Trust (MSOL) (MSOL.US) also opened at around $20 per share and traded 951,216 shares, with a turnover of about $19 million, but failed to increase its circulation share. Together, the two products sold $38 million. Against the backdrop of a total inflow of Ethereum-related funds across the US of about $14.5 million, MSSE (MSSE.US) accounts for more than one-third of the inflows, showing strong performance. In contrast, BlackRock's (BLK.US) ETHB (ETHB.US) with staking features poured in $5.9 million, and its larger spot Ethereum fund ETHA (ETHA.US) added $3.5 million in capital. The Solana circuit showed a diametrically opposite trend. Investors massively redeemed Bitwise's BSOL (BSOL.US) funds, leading to an overall net outflow of US$18.1 million from mainstream Solana funds.

This clear and warm performance was an early test of Morgan Stanley (MSSE.US)'s ability to seize the market: MSSE (MSSE.US)'s secondary market transactions were effectively transformed into new managed assets, while MSOL (MSOL.US), although trading was quite popular, failed to attract new capital to enter the market in an environment where capital holdings were generally reduced in the industry.

The dismantling of the rate structure shows that Morgan Stanley (MS.US) is launching an all-out price war. The agency launched these two products on July 28, and previously launched Morgan Stanley Bitcoin Trust (MSBT) (MSBT.US) in April, which has managed more than $400 million in assets. On the Ethereum and Solana circuit, MSSE (MSSE.US) and MSOL (MSOL.US) only charge 0.14% of the product management fee per year, and Morgan Stanley (MS.US) itself does not distribute any pledge proceeds. The custodian and staking service provider together only take 5% of the total staking rewards, and all remaining profits are kept in trust accounts.

This model has a significant advantage over competing products. According to data compiled by Woofun AI, in the Solana ETF industry, Bitwise's BSOL (BSOL.US) management fee is 0.20%, and service providers share 6% of the pledge income; Grayscale GSOL (GSOL.US) management fee is 0.19%, and service providers share 7%; Franklin Templeton (BEN.US) SOEZ (SOEZ.US) staking revenue share is 8%; 21Shares has a minimum share of 10%, Fidelity 15%. Up to 25% with VanEck and Farside Investors. On the Ethereum ETF side, Grayscale's low-cost product management fee is 0.15% and the pledge share is 6%; BlackRock (BLK.US) ETHB (ETHB.US) regular management fee is 0.25%, and 21Shares' TETH (TETH.US) stake share is 25%, and the grayscale large-cap Ethereum Trust ETHE.US (ETHE.US) stake share is 23%.

Although BlackRock (BLK.US) reduced the previous $2.5 billion management fee to 0.12% within 12 months from March, its regular rate remained at 0.25%, and the long-term cost advantage of Morgan Stanley (MS.US) is still clear.

The pledge strategy mechanism and revenue distribution model are another key competitive dimension. For crypto funds that support staking, the investor's final return depends on the asset pledge ratio and the intermediary's retention ratio. MSSE (MSSE.US) rules stipulate that in a normal market environment, 50% to 80% of Ethereum positions are used for pledge, and 80% is set as the maximum pledge limit in the prospectus. The specific ratio can be adjusted flexibly according to redemption requirements, on-chain unlocking time, and market liquidity. MSOL (MSOL.US)'s staking strategy is more aggressive. A trust can stake up to all Solana tokens, reserving only a portion of the tokens to cope with daily redemptions and guarantee liquidity. The net pledged income of the two funds is paid monthly in cash, with a minimum guarantee of quarterly dividends. Proceeds are first accrued in Ethereum or Solana tokens, then the trust sells the equivalent cryptocurrency in exchange for cash and distributed to fund holders.

This mechanism allows ordinary investors to obtain pledged income through traditional brokerage accounts without having to keep their own cryptographic tokens or connect to blockchain verification nodes.

Despite outstanding rate advantages, Morgan Stanley (MS.US) still faces a deep first-mover barrier from established funds. Bitwise BSOL (BSOL.US) has accumulated a net inflow of US$892 million, with total capital of US$1.12 billion for all Solana ETFs according to Farside, of which BSOL (BSOL.US) contributed the vast majority; BlackRock (BLK.US) spot Ethereum ETHA (ETHA.US) has attracted a cumulative total of US$11.4 billion, and ETHB (ETHB.US) with a staking function has also accumulated US$529 million. These established funds have a longer trading history and a strong investor base.

However, Morgan Stanley (MS.US) has unique channel barriers. Bloomberg intelligence analyst Eric Balchunas pointed out that with nearly 16,000 financial advisors and a total management volume of 2.6 trillion US dollars of customer assets, these two new products are the most important additional supply since the launch of the Ethereum and Solana ETFs. It is estimated that by the end of 2025, the total client assets of Morgan Stanley (MS.US) Wealth Management will reach $7.4 trillion, covering more than 20 million customers. Bitcoin, Ethereum, and Solana spot trading was fully launched through the ETRADE securities platform, and cooperated with Galaxy Digital to allow qualified high-net-worth customers to exchange crypto assets for spot crypto ETF shares. Morgan Stanley (MS.US) is using a huge offline financial management network to reach ordinary financial management customers, breaking through the bottleneck of competing products limited to native crypto investors.