On January 6, 2026, Eastern Standard Time, Morgan Stanley submitted an S-1 registration application for the Solana ETF/Trust to the U.S. Securities and Exchange Commission (SEC), a move that quickly sent ripples through both traditional finance and the cryptocurrency market. This is not only a new attempt at Solana but is also seen as a symbolic moment where Wall Street's top investment bank formally bets on the narrative of this "third-generation public chain." On one side, funds and institutions are accelerating their search for new high-beta targets beyond Bitcoin and Ethereum, while on the other, the SEC continues its cautious, delayed, and gradual approach to the approval of crypto financial products. Whether Solana can truly take over from Bitcoin and Ethereum in this tug-of-war between regulation and capital, becoming the next main battlefield in Wall Street's asset allocation, remains an open question.
Top Investment Banks Take Action: Solana Enters Wall Street's Sight
● Traditional Status and Crypto Path: Morgan Stanley is one of the most influential investment banks on Wall Street, and its voice in wealth management, asset management, and investment banking makes its asset allocation views a "barometer of institutional consensus." In the early stages of Bitcoin and Ethereum, Morgan Stanley primarily tested the waters through research reports, indirect exposure, and providing limited access to high-net-worth clients. Now, however, it has directly submitted an application for the Solana ETF/Trust, indicating a shift in attitude from "watching and testing" to "productization and scaling."
● First Top Investment Bank to Apply for Solana: The account @solana_stream from the crypto discourse described this S-1 as the "first financial product application for Solana initiated by a top Wall Street investment bank," highlighting the unique positioning of the event. Previously, products related to Solana were mostly at the level of asset management institutions or niche ETF providers, but for the first time, Morgan Stanley's name appears alongside Solana in the SEC filings, marking a significant entry into the direct view of top Wall Street investment banks.
● Expected Turnaround in Positioning: Another market observer, @DegenerateNews, bluntly stated, "Morgan Stanley's entry may change Solana's positioning in the eyes of institutional investors." Prior to this, Solana was often seen as a high-risk bet in the high-performance public chain space, while the application from a top investment bank itself is interpreted as a "credit endorsement" of its liquidity depth, ecological extensibility, and narrative continuity. Even if the SEC's outcome is uncertain, market expectations have begun to subtly shift from "speculative asset" to "potential component of a portfolio."
● Choosing ETF/Trust Over Spot Business: Morgan Stanley opted to enter through an ETF/Trust structure rather than significantly expanding Solana exposure in proprietary or spot brokerage business, which itself conveys considerations of compliance and risk management. On one hand, ETFs/Trusts can outsource key aspects such as custody, security, and disclosure to professional partners through regulated fund vehicles, reducing the direct technical and operational risks for bank-holding institutions; on the other hand, in the context of tightening global regulations, meeting client demand through registered products aligns better with the compliance roadmap of large licensed institutions than directly providing spot trading.
From Bitcoin to Ethereum: The SEC's Rhythm and Solana's Reference Frame
● The "Delayed Path" from Rejection to Approval: Looking back at the evolution of Bitcoin and Ethereum ETFs, the SEC has consistently adopted a path of "first rejection, then delay, and finally partial approval under pressure and when conditions mature." Bitcoin ETFs were initially rejected multiple times, with futures ETFs breaking the ice first, and only under judicial and political pressure did spot ETFs finally get approved; Ethereum underwent a similar process. This deliberate extension of the decision-making cycle essentially buys time for the maturation of regulatory frameworks and market structures, leaving room for policy maneuverability.
● Differences Between Futures, Spot, and Basket Products: From a regulatory perspective, futures ETFs are more readily accepted due to their reliance on regulated derivatives markets for price discovery and risk control; spot ETFs, however, directly connect on-chain and off-chain liquidity, involving custody security and manipulation risks, and are classified by the SEC as high-sensitivity areas. Additionally, single-asset ETFs and multi-asset basket ETFs raise policy questions about "whether to amplify single asset risk exposure." Solana-related applications will inevitably need to find a foothold between these existing paradigms, referencing the precedents of Bitcoin and Ethereum while facing additional questions arising from its own chain characteristics.
● Current Process Position and Uncertainty: Based on existing public information, Morgan Stanley submitted the S-1 application to the SEC on January 6, 2026, which means Solana products have officially entered the U.S. securities registration process. However, apart from this date, the SEC has not disclosed any specific review timeline, evaluation milestones, or hearing arrangements. In the absence of an official schedule, any specific time predictions regarding "when it will be approved or rejected" fall outside the boundaries of available information and should be strictly avoided.
● Continuation of Existing Regulatory Considerations: In the reviews of Bitcoin and Ethereum, the SEC repeatedly mentioned core indicators such as degree of decentralization, market manipulation risks, liquidity depth, and technical reliability. Solana's technical route brings performance advantages but also raises issues such as on-chain downtime and node centralization, which may be included in the "technical and governance risk" framework. In the eyes of the SEC, how to acknowledge a public chain with ongoing technical disputes without sacrificing investor protection may become a foreshadowing of Solana's unique challenges.
The Halo and Burden of the Third-Generation Public Chain: Solana's Regulatory Portrait
● Institutional Appeal of High-Performance Narrative: Solana is often labeled as a "third-generation public chain" in the crypto world, promoting its high throughput, low transaction costs, and performance narrative aimed at large-scale applications. This technical positioning naturally aligns with institutions' imaginations of "scalable infrastructure," providing a narrative foundation for its role as the next-generation on-chain settlement and application platform, and making it seen as a potential high-growth, high-volatility supplementary asset after "Bitcoin as a store of value and Ethereum as a general settlement layer."
● Systemic Risks from Downtime and Centralization Controversies: However, Solana has historically experienced multiple network downtimes and block production interruptions, compounded by concerns over the excessive concentration of validating nodes and key ecological infrastructure. These controversies may be viewed as "costs of technological iteration" within the crypto community but could be amplified as potential systemic risk points in the eyes of regulators. Once a chain carries large-scale traditional capital exposure, a technical failure is no longer just an internal issue for the developer community but could evolve into a regulatory event affecting a wide range of investors' rights.
● The Gray Area of Decentralization and "Securities Attributes": Compared to Bitcoin, which is generally viewed as a "commodity-like asset," and Ethereum, which has received some regulatory tacit approval regarding its degree of decentralization and ecological breadth, Solana remains in a more controversial gray area regarding governance structure, token distribution, and the influence of the core development team. The SEC has historically relied heavily on the initial issuance of projects and the roles of teams in determining "securities attributes," and Solana is likely to be placed in a fuzzy zone between Bitcoin and Ethereum, where standards have not yet fully crystallized.
● Key Directions for Regulatory Inquiry: Based on the above context, regulators are likely to focus their inquiries when reviewing the Solana ETF/Trust around several dimensions: first, infrastructure stability, including the causes of historical downtimes, improvement paths, and residual risks; second, compliance risks of ecological projects, such as whether there is high concentration and lack of transparency in applications that carry value; third, information disclosure difficulties, including how to adequately and understandably explain the technology and governance structure of a highly complex public chain to ordinary investors within the framework of traditional prospectuses and periodic reports.
Lessons from the Past: Early Solana ETF Rumors and Explorations
● Franklin and NYSE Arca's "To Be Verified" Case: Research briefs indicate that on December 2, 2025, NYSE Arca was rumored to have approved the listing of the Franklin Solana ETF, but this information is still in a "to be verified" status. Due to the lack of authoritative regulatory documents and public announcements from the exchange, these claims cannot yet be regarded as established facts and should not be repeatedly cited as established regulatory precedents in analysis.
● The Ambiguous Outline of Bitwise and 21Shares Products: Similarly, in October-November 2025, there were reports of Bitwise, 21Shares, and other institutions launching Solana ETF products, but research briefs clearly categorized them as "to be verified information." This means that until confirmatory evidence emerges, we can only view them as signals at the level of market exploration or product conception, rather than extending narratives based on definitive product scale, terms, and listing situations.
● Institutional Interest Reflected Behind the Rumors: Even if these messages have not been fully substantiated, they still reflect a trend: traditional asset management institutions have long been exploring the possibility of productizing Solana. Whether submitting listing applications to exchanges or conducting internal design and compliance assessments, these actions represent evaluations of Solana's liquidity, investor demand, and long-term narrative, indicating that it is no longer a niche asset limited to retail and crypto-native institutions.
● Transition from Marginal Experiments to Top Investment Bank Bets: Because early cases mostly remained at the level of "rumors" or relatively marginalized ETF issuers, Morgan Stanley's formal submission of the S-1 stands out. Compared to previous scattered messages, this action signifies a leap from "the market has heard someone is working on Solana products" to "a top Wall Street investment bank is making a direct bet with its own brand and compliance resources." This change in identity and weight marks Solana's transition from an experimental financial engineering target to a candidate potentially included in mainstream institutional asset allocation baskets.
Capital Narrative and Regulatory Tug-of-War: Solana's Midfield Standoff
● Imagination Space for High Beta Configuration Role: From the perspective of institutional asset allocation, if the Solana ETF is ultimately approved, it is highly likely to be positioned as a high beta, growth-oriented, and highly volatile satellite asset within portfolios. Bitcoin and Ethereum are more like "core positions" and "foundational exposures," while Solana has the opportunity to enhance portfolio return elasticity and amplify gains during bull markets, but is also viewed as a primary source of drawdown and risk, suitable for strict boundary and limit management.
● Seizing Future Windows and Managing Scale: For Morgan Stanley, submitting the S-1 on January 6, 2026, is not only a bet on the Solana narrative but may also be a competition for future exchange launch windows and potential asset management scale (AUM) influence. In the competition for Bitcoin and Ethereum ETFs, being the first to be approved and seizing liquidity high ground often leads to long-term scale advantages among homogeneous products. Even if the SEC's review rhythm is unpredictable, early layout applications can help secure a position in the first tier.
● The Tug-of-War Between Wall Street's Rush and the SEC's Steady Review: The current situation can be summarized as "Wall Street rushing to apply, while the SEC reviews step by step." On one hand, investment banks and asset management institutions hope to secure their positions before policies are clarified by actively submitting new products; on the other hand, the SEC continues to advance according to its usual procedural rhythm, maintaining high sensitivity to technical risks and market structures. This temporal misalignment amplifies emotional fluctuations at the market level: application news ignites optimistic expectations, while regulatory silence continually cools short-term sentiment.
● The Midfield Stage of Narrative Precedence: Before the review results are finalized, Solana is likely to remain in a long-term "narrative precedence, with price and sentiment in repeated contention" midfield stage. The existence of the S-1 provides structural imaginative space for bulls, but in the absence of a timeline and clear regulatory stance, every rumor, comment, or technical event may be amplified by the market. For speculative funds, this is a paradise of high volatility; for long-term allocators, it is a test period where they must filter information and impose risk constraints to resist emotionally driven market movements.
Whose Side is Time On: Solana's Institutional Crossroads
● Symbolic Significance of the Event: Morgan Stanley's submission of the Solana ETF/Trust S-1 on January 6, 2026, marks a new stage in Solana's institutionalization process. This is not just the establishment of a single product but also a shift in the rhythm of Wall Street's layout: top investment banks are now willing to invest compliance costs and brand risks in a highly controversial public chain, indicating that it has been included in the main menu of medium- to long-term asset allocation discussions.
● Regulatory Information Gap and Uncertainty: However, from a regulatory perspective, the publicly available information we currently have is still extremely limited. Key details such as product scale, fee structure, trading code design, SEC review timeline, and internal attitudes of regulators are all in an information vacuum. Research briefs have clearly stated that these contents have not been publicly disclosed, and any projections regarding specific timelines or approval paths lack a basis, acknowledging that uncertainty itself is the main theme at this stage.
● Possible Path Divergence: Following the projection of future paths, if the Solana ETF is approved at some point, it has the opportunity to form a prototype of the "institutional triad" alongside Bitcoin and Ethereum, occupying a stable position in asset allocation, research coverage, and macro narratives; conversely, if approval is long obstructed or clearly signaled to be suppressed, Solana is likely to be reclassified as a trading asset under the "high-risk public chain" label, forcing its institutionalization process back onto a slower, more marginal track.
● Investor Attitudes Toward Regulatory Uncertainty: In the absence of clear answers from regulators, what investors need to be most vigilant about is emotion-driven short-term volatility. In the face of ETF rumors related to Solana, social media sentiment, and second-hand interpretations, priority should be given to official SEC documents, exchange announcements, and authoritative institutional research, rather than treating unverified news as a basis for decision-making. In this contest of time and patience, maintaining calm amidst information noise may be more important than being the first to place a bet.
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