Morgan Stanley, one of the significant global asset managers, is contemplating incorporating cryptocurrency trading into its E-Trade online brokerage platform. This move comes amidst expectations of a more favorable regulatory landscape for cryptocurrencies under the incoming U.S. administration led by President-elect Donald Trump. The President-elect has indicated plans to appoint pro-industry leaders to crucial regulatory positions and aims to position the United States as a leading hub for cryptocurrencies.
Such a development would position E-Trade among the major traditional retail brokerage platforms embracing cryptocurrency trading, thereby intensifying the competition against existing platforms like Coinbase. E-Trade, acquired by Morgan Stanley in 2020, manages around 5.2 million accounts with a collective value of approximately $360 billion.
Other brokerages like Robinhood, Fidelity, and Interactive Brokers have already ventured into the cryptocurrency trading space. Charles Schwab is also reportedly planning to introduce crypto trading soon. Generally, the range of tokens available through these brokerages is more limited compared to those provided by crypto-native exchanges such as Coinbase.
The cryptocurrency trading market has proved profitable for online brokerages. For instance, Robinhood reported a significant increase in its crypto trading volumes and revenue in the third quarter of 2024. The platform reached $14.4 billion in trading volume and $61 million in revenue, marking year-on-year increases of 112% and 165%, respectively. Furthermore, Robinhood’s acquisition of Bitstamp, a crypto exchange, in a $200 million deal is set to enable it to cater to institutional investors in the U.S.
Morgan Stanley differentiates itself from other traditional wealth managers by being an early adopter of cryptocurrencies. In August, the firm permitted its 15,000 financial advisers to offer Bitcoin exchange-traded funds (ETFs) to their clients. This advisory network manages approximately $3.75 trillion, including $1 trillion in self-directed client accounts. Among the recommended funds are BlackRock’s iShares Bitcoin Trust and Fidelity’s Wise Origin Bitcoin Fund, both considered to be top-tier Bitcoin ETFs.
