Morgan Stanley considers adding cryptocurrency options to its E-Trade platform
Morgan Stanley, one of the world’s largest asset managers, is considering a significant expansion into the cryptocurrency market by adding trading capabilities to its E-Trade online brokerage platform. According to a recent report by The Information, this move would make E-Trade one of the biggest traditional retail brokerages to support crypto trading.
Regulatory Environment and Expectations
The decision to add crypto trading is reportedly influenced by expectations of a friendlier regulatory environment under United States President-elect Donald Trump. Trump has promised to appoint industry-friendly leaders to key regulatory agencies and make the US "the world’s crypto capital." This shift in regulatory stance could pave the way for greater adoption and innovation in the cryptocurrency space.
Competitive Landscape
The addition of crypto trading on E-Trade would create meaningful competition for incumbent platforms, such as Coinbase. Other traditional retail brokerages offering crypto trading include Robinhood, Fidelity, and Interactive Brokers. Charles Schwab reportedly plans to add crypto trading this year, according to Bloomberg. However, the available tokens on these platforms are generally more limited than those offered on crypto-native centralized exchanges like Coinbase.
Growing Demand for Crypto Trading
Crypto trading has proven to be a lucrative business for online brokerages. Robinhood’s Q3 2024 results show that crypto trading volume and revenue soared by 112% and 165%, respectively, coming in at $14.4 billion and $61 million. In June, Robinhood agreed to acquire the Bitstamp crypto exchange in a $200 million deal, enabling it to serve institutional investors in the United States.
Coinbase’s Dominance
Incumbent Coinbase clocked revenues of $1.2 billion in the third quarter of 2024, primarily from its crypto trading businesses. Despite this dominance, traditional brokerages are increasingly entering the market, driven by growing demand and regulatory changes.
Morgan Stanley’s Early Mover Advantage
Morgan Stanley has been an earlier mover in crypto compared with other traditional wealth managers. In August, Morgan Stanley authorized its 15,000 financial advisers to start recommending Bitcoin exchange-traded funds (ETFs) to clients. As one of the largest wealth managers in the US, Morgan Stanley’s advisory network manages some $3.75 trillion, including $1 trillion in self-directed client accounts.
Cryptocurrency Adoption and Regulatory Shift
The adoption of cryptocurrency trading by traditional brokerages like E-Trade is a significant development in the industry. As regulatory environments evolve, we can expect to see more innovation and growth in the space. With Morgan Stanley’s plans to add crypto trading to its platform, investors will have greater access to this emerging market.
Key Takeaways
- Morgan Stanley is considering adding cryptocurrency trading to its E-Trade online brokerage platform.
- The decision is influenced by expectations of a friendlier regulatory environment under President-elect Donald Trump.
- Other traditional retail brokerages are also entering the crypto space, driven by growing demand and regulatory changes.
- The addition of crypto trading on E-Trade would create meaningful competition for incumbent platforms like Coinbase.
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- Brokerages Embrace Crypto
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