Morgan Stanley Targets Crypto ETF Fee Crown – While Franklin Templeton Wants Your Stock Dividends Buying Bitcoin

Recent filings from Wall Street firms highlight two ETF strategies emerging in crypto: one competing on fees, the other on product innovation.

• Morgan Stanley filed spot Ethereum and Solana ETFs with a 0.14% fee, which would be the lowest in both categories globally, Bloomberg ETF analyst Eric Balchunas said.
• The proposed funds would stake crypto holdings and pass 95% of rewards to investors, with the Solana ETF able to stake up to 100% of its assets.
• Franklin Templeton filed two ETFs that automatically reinvest stock dividends into Bitcoin, combining traditional equity exposure with BTC accumulation.

Two of Wall Street’s largest asset managers submitted crypto exchange-traded fund (ETF) applications to the Securities and Exchange Commission (SEC) within hours of each other on Thursday, using different approaches on the same playing field.

Morgan Stanley (MS) filed amended S-1 registration statements for the Morgan Stanley Ethereum Trust and the Morgan Stanley Solana Trust, with plans to list both on NYSE Arca with the tickers MSSE and MSOL. Each has a unitary sponsor charge of 0.14% per annum, payable monthly in cash, accruing daily on the net asset value.

If approved, the 0.14% rate would be the lowest sponsor fee across US Ethereum and Solana ETF categories, beating out Grayscale’s Mini Ethereum Trust (ETH) at 0.15%, Franklin Templeton’s Solana ETF (SOEZ) at 0.19%, Bitwise’s Solana staking ETF (BSOL) at 0.20%, and BlackRock’s iShares Ethereum Trust (ETHA) at 0.25%. 

“Morgan Stanley Ether and Solana ETFs nearing launch. The fee on each is going to be 14bps making them the cheapest in U.S. and world” said Bloomberg ETF analyst Eric Balchunas.

Both trusts will stake holdings via Figment, Galaxy (GLXY), and Coinbase (COIN) Canada, and 95% of the staking rewards will be passed on to shareholders. Under normal circumstances, the Ethereum trust plans to stake between 50% and 80% of its Ether, while the Solana trust may stake up to 100% of its SOL. 

The new fee structure is similar to Morgan Stanley’s Spot Bitcoin ETF (MSBT), which launched in April at the same 0.14% rate and has pulled in roughly $300.7 million of cumulative total net flows as of Thursday, as per Sosovalue data.

Franklin Templeton Rewires The Wrapper

On the same day, Franklin Templeton (BEN) filed registration paperwork for two ETFs that would convert stock dividends into Bitcoin (BTC).

Franklin US Equity Bitcoin DRIP Index ETF and Franklin US Innovation Bitcoin DRIP Index ETF would follow VettaFi indexes, with an initial composition of 95% stocks and 5% bitcoin. Regular and special dividends will be reinvested in bitcoin at the market open on the day after the ex-date. If Bitcoin goes above 5%, the funds would reduce to 4.5% at each quarterly rebalance, with a hard cap of 20% between quarters.

The company would offer exposure through spot Bitcoin ETPs, futures, options, and a wholly owned Cayman Islands branch. Franklin Templeton is yet to disclose fees, tickers, or listing exchanges.

The same-day filings on the same date show that the U.S. cryptocurrency ETF market has divided into two major competitive tracks: Morgan Stanley and Grayscale compete by lowering fees, while Franklin Templeton and BlackRock (BITA) gain a competitive edge through product design.

Both Morgan Stanley filings remain under SEC review with no launch date announced yet. The Franklin Templeton ETFs are automatically effective within 75 days pursuant to Rule 485(a)(2), and could go live as early as September 1 unless absent SEC intervention.

At the time of writing, Bitcoin’s price was trading at $64,115, down 0.2% in the last 24 hours. On Stocktwits, retail sentiment around BTC remained in the ‘neutral’ zone, while chatter stayed at ‘low’ levels over the past day. 

Bitcoin has been down over 26% so far this year.

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