In a significant move signaling Wall Street's deepening embrace of digital assets, Morgan Stanley has filed with the Securities and Exchange Commission to launch exchange-traded funds tied to Bitcoin and Solana, according to filings reported by Reuters. The submissions, made on Tuesday, mark the first time a major U.S. bank has pursued approval for cryptocurrency ETFs, potentially broadening access to these volatile assets for institutional and retail investors alike. This development comes amid a surge in demand, as spot Bitcoin ETFs recorded net inflows of $1.16 billion over just two days, highlighting renewed institutional interest in the crypto market.
The filings represent a pivotal shift for traditional finance, as Morgan Stanley builds on its earlier expansions into the crypto space. In October, the bank extended cryptocurrency access to all its clients, allowing them to trade digital assets through its platforms. Similarly, Bank of America began permitting its wealth advisers to recommend crypto allocations to clients starting in January. These steps follow a wave of regulatory changes that have eased barriers between conventional banking and blockchain-based currencies.
Regulatory clarity has played a key role in this momentum, particularly under the administration of President Donald Trump. In December, the Office of the Comptroller of the Currency issued guidance permitting national banks to act as intermediaries for cryptocurrency transactions, effectively bridging the divide between legacy finance and emerging digital markets. Officials at the OCC described the update as a way to "foster innovation while maintaining safety and soundness," though critics have raised concerns about the risks of integrating unregulated assets into the banking system.
Spot Bitcoin ETFs have been at the forefront of this institutional buying spree. On Monday, BlackRock's iShares Bitcoin Trust, traded under the ticker IBIT on Nasdaq, led the pack with $372.47 million in net inflows—the largest single-day amount for any Bitcoin ETF to date. The fund, which launched in early 2024, now manages $73.39 billion in total net assets, with cumulative inflows reaching $62.75 billion since inception. BlackRock executives have touted the ETF as a "secure and efficient way" for investors to gain exposure to Bitcoin without directly holding the cryptocurrency.
Fidelity Investments' Wise Origin Bitcoin Fund, listed as FBTC, followed closely with $191.19 million in inflows on the same day. Nine out of the twelve spot Bitcoin ETFs posted positive flows, including Bitwise's BITB at $38.45 million, Ark Invest and 21Shares' ARKB at $36.03 million, and even Grayscale's GBTC, which saw $17.92 million added despite its historical outflows. Grayscale, long a dominant player in crypto investment products, has been working to convert its trust into an ETF format to compete more effectively with newer entrants.
The enthusiasm extended beyond Bitcoin. Spot Ethereum ETFs attracted $168.13 million in net inflows on Monday, reflecting growing confidence in the second-largest cryptocurrency by market capitalization. Newly launched ETFs tracking alternative coins such as XRP, Solana, Dogecoin, and Chainlink also reported gains, though specific figures for these products were not immediately disclosed in the filings. This broader interest underscores a maturing market where investors are diversifying beyond just the flagship digital currency.
"The demand across major assets points to improving market sentiment, with potential for sustained price gains throughout 2026 if institutional participation and favorable regulatory developments continue," said Nick Ruck, director at LVRG Research, in a statement to market analysts. Ruck's comments align with observations from other experts who attribute the inflows to a seasonal shift in investor behavior. After tax-loss harvesting at the end of 2025, many funds appear to be pivoting to long positions in the first quarter of 2026, coupled with heightened risk appetite and trust in regulated crypto investment vehicles.
This recent activity builds on strong performance from the prior trading session. On January 2, 2026—the first trading day of the new year—Bitcoin and Ethereum ETFs combined for $646 million in inflows, setting a bullish tone for the month. Analysts at firms like Bloomberg Intelligence have noted that such volumes indicate a structural change in how institutions view cryptocurrencies, moving from speculative bets to core portfolio components.
Morgan Stanley's ETF proposals come at a time when the crypto industry is still navigating post-2022 recovery challenges. The filings specify that the funds would track the spot prices of Bitcoin and Solana, respectively, using custodians to hold the underlying assets securely. If approved, these products could launch as early as mid-2026, pending SEC review, which has historically taken several months for similar applications. The SEC has approved over a dozen Bitcoin ETFs since January 2024 but has been more cautious with altcoin products, citing concerns over market manipulation and liquidity.
Wall Street's involvement isn't without controversy. While proponents argue that ETFs democratize access to crypto—reducing the need for investors to manage private keys or worry about exchange hacks—regulators and consumer advocates warn of the inherent volatility. Bitcoin's price, for instance, fluctuated between $90,000 and $110,000 in recent weeks, driven partly by these ETF flows. Solana, known for its high-speed transactions, has seen its token value rise 150% over the past year, but it remains susceptible to network outages that have plagued the blockchain in the past.
Broader market data supports the narrative of institutional adoption. According to reports from CoinShares, a crypto asset management firm, global institutions purchased over $2.5 billion in digital assets during the final quarter of 2025 alone. This trend is echoed in surveys from PwC, where 40% of institutional investors now hold some crypto exposure, up from just 10% in 2023. However, not all voices are optimistic; some economists, like those at the Federal Reserve, have cautioned that rapid integration could amplify systemic risks if a crypto downturn coincides with traditional market stress.
Looking ahead, the success of Morgan Stanley's filings could pave the way for other banks to follow suit. JPMorgan Chase and Goldman Sachs have already dipped toes into crypto through proprietary trading desks, but public ETF offerings would represent a more aggressive stance. Industry watchers predict that by the end of 2026, crypto ETFs could manage over $200 billion in assets, rivaling some of the largest equity funds. The SEC's upcoming decisions on these and other altcoin proposals will be closely watched, as they could either accelerate or temper the pace of mainstream adoption.
In the meantime, the $1.16 billion in Bitcoin ETF inflows over the past two days serves as a barometer of investor sentiment. With trading volumes spiking and prices trending upward, the crypto market appears poised for another transformative year. As one anonymous trader put it in a forum post echoed by market reporters, "Wall Street's finally waking up to what we've known for years—crypto isn't going anywhere." Whether this optimism holds will depend on sustained regulatory support and the resilience of the underlying technologies.
The interplay between these ETF developments and real-world applications adds further context. Solana, for example, powers decentralized finance platforms and non-fungible token marketplaces, while Bitcoin continues to be viewed as digital gold. Morgan Stanley's move could encourage more innovation, such as tokenized real-world assets on these blockchains, blurring lines even further between finance sectors.
Ultimately, Tuesday's filings by Morgan Stanley underscore a broader evolution in global finance. As institutions pour billions into crypto vehicles, the question remains: Will this influx stabilize the market, or merely fuel another boom-and-bust cycle? For now, the data points to cautious optimism, with experts like Ruck emphasizing the role of ongoing regulatory tailwinds in shaping the trajectory.