Morgan Stanley, one of the world’s top asset managers, is considering enabling cryptocurrency trading on its E-Trade online brokerage platform, according to a January 2 report by The Information.
Crypto-Friendly Policies Under Trump Administration
The report cites expectations of a more crypto-friendly regulatory environment under incoming U.S. President Donald Trump as a driving factor behind Morgan Stanley’s plans. Trump has pledged to appoint pro-industry leaders to regulatory agencies and position the U.S. as “the world’s crypto capital.”
If implemented, the move would make E-Trade one of the largest traditional retail brokerages to offer cryptocurrency trading, potentially challenging platforms like Coinbase. Morgan Stanley acquired E-Trade in 2020, with the platform’s 5.2 million accounts holding approximately $360 billion in assets.
Growing Interest in Crypto Trading Among Brokerages
Morgan Stanley’s potential entry into crypto trading comes amid growing interest from traditional brokerages. Robinhood, Fidelity, and Interactive Brokers already offer cryptocurrency trading, while Charles Schwab is reportedly planning to join the space this year.
These platforms typically offer a smaller selection of tokens compared to crypto-native exchanges like Coinbase. However, crypto trading has proven highly profitable for brokerages. Robinhood, for example, reported a 112% increase in crypto trading volume and a 165% surge in crypto-related revenue in Q3 2024, generating $14.4 billion in trading volume and $61 million in revenue.
Robinhood’s recent $200 million acquisition of Bitstamp aims to expand its reach into institutional crypto trading, while Coinbase reported $1.2 billion in revenue for Q3 2024, primarily from its crypto trading operations.
Morgan Stanley’s Early Adoption of Crypto
Morgan Stanley has been quicker than most traditional wealth managers in embracing cryptocurrency. In August 2024, the firm authorized its 15,000 financial advisers to recommend Bitcoin exchange-traded funds (ETFs) to clients.
The bank’s advisory network manages approximately $3.75 trillion, including $1 trillion in self-directed accounts. Advisers have been actively recommending top Bitcoin ETFs, such as BlackRock’s iShares Bitcoin Trust (IBIT) and Fidelity’s Wise Origin Bitcoin Fund (FBTC), both considered reliable options for institutional investors.
If Morgan Stanley proceeds with crypto trading on E-Trade, it could create significant competition for established players like Coinbase while making cryptocurrencies more accessible to retail investors. The move would also reflect a broader trend of increased crypto adoption among traditional financial institutions, further legitimizing the digital asset market.
