Morgan Stanley is considering integrating cryptocurrency trading into E-Trade, based on expectations of a more cryptocurrency-friendly policy from the incoming administration of President-elect Donald Trump.
According to a report from The Information on January 2, Morgan Stanley is expected to leverage the more favorable regulatory environment as Trump commits to bringing pro-cryptocurrency leaders into key regulatory agencies. He has also emphasized the goal of making the U.S. the 'global cryptocurrency capital.'
If implemented, E-Trade could become one of the largest retail brokerage platforms to enter the cryptocurrency market, directly competing with specialized exchanges like Coinbase.
Source: E-Trade
Acquired by Morgan Stanley in 2020, E-Trade currently manages approximately $360 billion and 5.2 million accounts. This expansion plan reflects a shift in how traditional financial institutions perceive cryptocurrency.
Brokerage firms such as Robinhood, Fidelity, and Interactive Brokers have provided digital asset trading services, while Charles Schwab is also expected to enter the market this year. However, the tokens offered on these platforms are still limited compared to centralized exchanges.
Cryptocurrency trading is becoming a significant revenue source for brokerage firms. Robinhood, for example, reported a 112% increase in cryptocurrency trading volume in Q3 2024, while revenue from this activity rose by 165% year-over-year, reaching $14.4 billion and $61 million. Not stopping there, Robinhood acquired Bitstamp for $200 million to expand into the institutional investment sector.
Morgan Stanley is no stranger to cryptocurrency. In August 2024, the firm allowed 15,000 financial advisors to introduce Bitcoin ETF funds to clients. With a network managing approximately $3.75 trillion, including $1 trillion in self-directed accounts, Morgan Stanley is solidifying its pioneering position in integrating digital assets. Bitcoin ETFs like BlackRock's iShares Bitcoin Trust (IBIT) and Fidelity's Wise Origin Bitcoin (FBTC) are currently in the portfolios recommended by financial advisors.