The financial world is witnessing a pivotal shift as Morgan Stanley moves closer to offering direct cryptocurrency trading services through its E*Trade platform. This strategic expansion marks one of the most significant steps yet by a major U.S. bank to bring digital assets into the mainstream investment landscape—reflecting broader changes in regulatory sentiment and market demand.
A Strategic Move Amid Regulatory Shifts
Morgan Stanley is currently developing plans to integrate cryptocurrency trading capabilities for E*Trade’s retail investors. According to sources familiar with the matter, the project is still in its early stages, with an anticipated launch sometime next year. The firm is evaluating partnerships with established crypto platforms to facilitate secure spot trading of major digital assets like Bitcoin (BTC) and Ethereum (ETH).
This initiative comes at a time of dramatic transformation in U.S. policy toward digital assets. Following Donald Trump’s campaign promises to make America the “global capital of cryptocurrency,” and his subsequent election victory in late 2024, regulatory barriers have begun to fall. Just days after taking office, the new administration issued an executive order aimed at strengthening U.S. leadership in digital asset innovation and fintech—while safeguarding economic freedom.
In response, federal agencies swiftly moved to roll back restrictive guidance. The Securities and Exchange Commission (SEC) rescinded controversial accounting rules that previously deterred banks from working with crypto firms. Meanwhile, both the Federal Reserve and the Federal Deposit Insurance Corporation (FDIC) withdrew 2023 advisories that had cautioned banks about risks associated with crypto-related activities.
These developments have empowered traditional financial institutions to reevaluate long-standing hesitations about entering the crypto space.
Why E*Trade Is the Ideal Gateway
E*Trade, acquired by Morgan Stanley in 2020, already offers clients access to crypto-related financial products, including Bitcoin and Ethereum exchange-traded funds (ETFs), ETF options, and futures contracts. However, direct ownership of digital tokens has remained out of reach—until now.
Internal discussions within Morgan Stanley about expanding into crypto intensified in late 2024. In January 2025, CEO Ted Pick confirmed the firm was actively engaging with regulators to explore safer pathways for offering expanded services in this asset class. Now, leadership believes enabling spot crypto trading on E*Trade represents the logical next step.
While the company has not officially confirmed details or named potential partners, industry analysts speculate it may collaborate with regulated U.S.-based custodians or established exchanges to ensure compliance and security.
Competitive Landscape Heats Up
Morgan Stanley’s move puts it on a collision course with existing crypto-native platforms such as Robinhood and Coinbase, which have long dominated retail crypto trading.
Robinhood, for instance, has offered cryptocurrency trading since 2018. In 2024, its crypto segment generated $626 million in revenue—accounting for 21% of total net revenue. With renewed investor interest fueled by pro-crypto policies, Robinhood reported more than doubled profits in Q1 2025 alone.
Meanwhile, Charles Schwab announced this week it aims to launch its own crypto trading service as early as 2025, with CEO Rick Wurster stating the regulatory environment is now “a pretty green green light.” He emphasized the service would likely go live within the next 12 months.
Even SoFi Technologies, which exited crypto trading in 2023, is reconsidering its position. CEO Anthony Noto said changing regulations could prompt a relaunch of crypto investment features on its platform.
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From Skepticism to Strategic Adoption
For years, major Wall Street banks approached cryptocurrencies with deep skepticism. Concerns over volatility, cybersecurity threats, fraud risks, and unclear regulation kept many institutions on the sidelines.
JPMorgan Chase CEO Jamie Dimon famously called Bitcoin a “fraud” and “worthless” in earlier years. Yet even he has softened his stance, acknowledging in 2024: “I defend your right to invest in Bitcoin.” JPMorgan itself now supports blockchain innovation through projects like JPM Coin and serves crypto firms as banking clients.
Morgan Stanley’s former CEO James Gorman was ahead of the curve, declaring in 2017 that Bitcoin was “not just a fad.” That foresight appears prescient today.
Another early mover has been BNY Mellon, which has advanced plans to custody digital assets. Under the previous administration, SEC Chair Gary Gensler acknowledged the bank had done “the foundational work,” issuing a “no-action letter” that gave regulatory reassurance.
FAQs: Your Questions Answered
Q: Will Morgan Stanley allow direct ownership of crypto?
A: While not yet confirmed, reports suggest the goal is to enable spot trading—meaning clients would directly own Bitcoin, Ethereum, and potentially other major tokens through their E*Trade accounts.
Q: When will crypto trading be available on E*Trade?
A: The service is expected to launch in 2026, though internal targets suggest a possible earlier rollout depending on regulatory alignment and technical readiness.
Q: Is this move driven by customer demand or regulation?
A: Both. Growing retail interest in digital assets, combined with a newly supportive regulatory climate, has created a favorable window for traditional finance to enter the space.
Q: How will Morgan Stanley ensure security for crypto holdings?
A: The firm is likely to partner with insured custodial solutions or regulated third parties to safeguard assets, minimizing exposure to hacks and operational risks.
Q: Could this lead to lower fees for crypto trading?
A: Increased competition from major brokerages may pressure existing platforms to reduce fees, potentially benefiting consumers across the board.
Q: Are other banks likely to follow?
A: Yes. With Schwab, SoFi, and BNY Mellon already exploring similar moves, broader adoption across traditional finance seems inevitable.
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The Future of Finance Is Converging
The integration of cryptocurrency trading into E*Trade symbolizes a turning point—not just for Morgan Stanley, but for the entire financial ecosystem. What was once dismissed as speculative noise is now being embraced by pillars of traditional finance.
As regulatory uncertainty recedes and infrastructure improves, more investors will gain seamless access to digital assets alongside stocks, bonds, and ETFs. This convergence promises greater liquidity, enhanced security, and broader legitimacy for the crypto market.
For retail investors, these developments mean easier, safer, and more familiar ways to participate in the digital economy. And for the industry, it signals that cryptocurrency is no longer a niche alternative—it's becoming a core component of modern wealth management.
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