Morgan Stanley filed an application for an Ethereum spot ETF on Wednesday. This marks the latest move among major U.S. banks. The application aims to create a product linked to ETH's price while distributing staking rewards to shareholders.
This report came days after Bank of America expanded client access to digital assets, driven by rising institutional investor demand.
Wall Street giants enter ETF market
On Tuesday, Morgan Stanley filed applications for ETFs linked not only to Ethereum but also to Bitcoin and Solana.
Although entering this space relatively late, this move marks Morgan Stanley's debut in the ETF market. The announcement comes about two years after the surge in U.S. cryptocurrency ETFs began.
Morgan Stanley's S-1 filing represents a significant step toward integrating cryptocurrencies into traditional finance. With $1.6 trillion in assets under management, the firm is expanding its clients' exposure to digital assets through regulated investment products.
This filing reflects a growing trend among established Wall Street institutions to increase their involvement in digital assets.
On Monday, BeInCrypto reported that Bank of America had granted its wealth management advisors the authority to recommend portfolio allocations of 1% to 4% in cryptocurrencies.
Prior to this, firms such as BlackRock, Fidelity, Goldman Sachs, JPMorgan, and Citigroup had already launched trading operations or tokenization services.
While banks are increasingly concerned about missing out on opportunities related to cryptocurrencies, the overall market has remained subdued, particularly over the past few months.
Bank support versus market weakness
Morgan Stanley's support is helping drive broader mainstream acceptance, but its announcement coincided with a period of heightened volatility.
Most Bitcoin spot ETF assets remain concentrated among individual investors, many of whom have recently suffered losses.
In response to these developments, the shift toward professional investors is accelerating, with institutional ownership rising from 20% to 28%. Market participation is gradually rebalancing.
Meanwhile, Bitcoin's market capitalization has declined by approximately $60 billion since October, small-cap indices have dropped to levels not seen since November 2020, and newly launched altcoin ETFs have quickly fallen into negative territory.
Further uncertainty arises from the expectation that U.S. President Trump may announce his Federal Reserve Chair nominee as early as Friday.
Kevin Hassett has emerged as a leading contender to succeed Jerome Powell as Fed Chair. If appointed, the market is expected to anticipate a more dovish monetary policy stance.
