Morgan Stanley to Launch Crypto Trading on E-Trade: What You Should Know

Morgan Stanley, the biggest global asset manager, has shown bullish interest in cryptocurrency in its E-Trade platforms, breaking an age-old barrier. According to a report by The Information, this decision aligns with expectations of a more crypto-friendly regulatory environment under incoming US President Donald Trump. The move shows how banks are getting serious about crypto assets with the changing crypto scenario in the US. 

Trump’s Crypto-Friendly Policies Fuel Interest

During his campaign, Trump promised to establish the U.S. as a global hub for cryptocurrency. His plans include appointing industry-friendly regulators and creating a Bitcoin Reserve to stabilize the economy. These proposals have sparked optimism in the financial sector, encouraging Morgan Stanley to explore crypto trading for the 5.2 million accounts on E-Trade, which manage around $360 billion in assets.

If successful, this initiative could make E-Trade one of the first major traditional financial institutions to compete directly with crypto-native exchanges like Coinbase. This would not only make cryptocurrency more accessible to mainstream investors but also mark a milestone in bridging traditional and digital finance.

Competing in a Crowded Crypto Market

E-Trade is entering a space already dominated by competitors like Robinhood, Fidelity, and Interactive Brokers, with Charles Schwab planning to join soon. However, these platforms often offer a limited selection of tokens compared to exchanges like Coinbase, which provide a broader range of assets.

Despite the competition, the profitability of crypto trading remains clear. Robinhood’s Q3 2024 results showed a 165% year-over-year increase in crypto revenue, reaching $61 million. Additionally, Robinhood’s $200 million acquisition of Bitstamp in June expanded its ability to serve institutional investors in the U.S. Meanwhile, Coinbase’s Q3 2024 revenue climbed to $1.2 billion, much of it generated from crypto trading.

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Morgan Stanley’s Crypto Momentum

Morgan Stanley has often been ahead of its peers in adopting cryptocurrency. In August, the firm authorized its 15,000 financial advisors to recommend Bitcoin ETFs to clients. These include BlackRock’s iShares Bitcoin Trust and Fidelity’s Wise Origin Bitcoin Fund, both considered premier Bitcoin ETFs.

With $3.75 trillion in assets under management, including $1 trillion in self-directed accounts, Morgan Stanley’s decision to integrate crypto trading into E-Trade could significantly expand access to digital assets.

Eyeing the Crypto Potential

Following the suit, other institutions like Goldman Sachs are also diving for clear crypto rules. Recently after hesitations and restricting crypto European Financial institutions are also shifting their focus on crypto with the implementation of the Markets in Crypto-Assets (MiCA) regulation.