Morgan Stanley Considers Adding Cryptocurrency to Its E-Trade Platform

In a move that could potentially disrupt the cryptocurrency trading landscape, Morgan Stanley, one of the world’s largest asset managers, is reportedly considering adding cryptocurrency trading to its E-Trade online brokerage platform. This decision is allegedly driven by expectations of a friendlier crypto regulatory environment under United States President-elect Donald Trump.

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Friendlier Regulatory Environment Under 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 policy could lead to a more favorable regulatory environment for cryptocurrency trading, which may have prompted Morgan Stanley to consider adding this feature to its E-Trade platform.

E-Trade’s Massive User Base

The plans would make E-Trade one of the biggest traditional retail brokerages to add support for crypto trading. With approximately 5.2 million accounts collectively holding around $360 billion in assets, E-Trade has the potential to bring cryptocurrency trading to millions of investors. This could create meaningful competition for incumbent platforms such as Coinbase.

Acquisition by Morgan Stanley

Morgan Stanley acquired E-Trade in 2020, and since then, there have been reports of its plans to expand into new areas, including cryptocurrency trading. The addition of crypto trading would likely be a significant step towards achieving this goal.

Competition from Other Brokerages

Other traditional retail brokerages offering crypto trading include Robinhood, Fidelity, and Interactive Brokers. Charles Schwab is also reportedly planning to add crypto trading this year, according to Bloomberg. However, the tokens available on these platforms are generally more limited compared to those offered by crypto-native centralized exchanges like Coinbase.

Growing Popularity of Crypto Trading

Cryptocurrency trading has been a lucrative business for online brokerages in recent times. Robinhood’s Q3 2024 results show that crypto trading volume and revenue soared by 112% and 165%, respectively, coming to $14.4 billion and $61 million. Coinbase also reported revenues of $1.2 billion in the third quarter of 2024, primarily from its crypto trading businesses.

Early Mover Advantage

Morgan Stanley has been an earlier mover in cryptocurrency compared to other traditional wealth managers. In August, it 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 around $3.75 trillion, including $1 trillion in self-directed client accounts.

Recommendations from Morgan Stanley Advisers

Morgan Stanley advisers have been recommending widely considered ‘blue chips’ among Bitcoin ETFs, such as BlackRock’s iShares Bitcoin Trust (IBIT) and Fidelity’s Wise Origin Bitcoin Fund (FBTC). This is a significant development, as it highlights the growing interest in cryptocurrency investments among traditional financial institutions.

Implications of Morgan Stanley’s Move

If Morgan Stanley does decide to add cryptocurrency trading to its E-Trade platform, it would likely have significant implications for the industry. It could create new opportunities for investors and potentially disrupt the market share of incumbent platforms like Coinbase.

Traditional Brokerages Embracing Cryptocurrency Trading

Related Developments

2025 will be crypto’s best year ever — Steno Research
Brokerages embracing crypto
Charles Schwab reportedly plans to add crypto trading this year, according to Bloomberg

Conclusion

The potential addition of cryptocurrency trading to E-Trade’s platform is a significant development in the industry. With millions of investors already using the platform and Morgan Stanley’s reputation as an early mover in cryptocurrency, this could be a game-changer for the market.