Cryptocurrency

Morgan Stanley Considers Adding Cryptocurrency Trading to E-Trade Platform

TokenTrail December 31, 2024

In a move that could potentially disrupt the cryptocurrency trading landscape, Morgan Stanley, one of the world’s largest asset managers, is considering adding cryptocurrency trading to its E-Trade online brokerage platform. According to a January 2 report by The Information, the wealth manager has been citing expectations of a friendlier crypto regulatory environment under United States President-elect Donald Trump as a key consideration.

Table of Contents

Trump’s Crypto-Friendly Stance

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 approach could potentially create a more favorable environment for cryptocurrency trading, which is currently facing uncertainty due to regulatory hurdles.

Regulatory Environment: A Game-Changer for Crypto?

The prospect of a friendlier regulatory environment under Trump’s administration has been cited as a key factor in Morgan Stanley’s consideration of adding cryptocurrency trading to its E-Trade platform. This move could potentially create a more level playing field for cryptocurrency traders, making it easier for them to access and trade cryptocurrencies.

What Does This Mean for E-Trade?

E-Trade is one of the largest traditional retail brokerages in the US, with over 5.2 million accounts collectively holding approximately $360 billion. If Morgan Stanley were to add cryptocurrency trading to its platform, it could potentially create meaningful competition for incumbent platforms such as Coinbase.

Crypto Trading: A Lucrative Business for Online Brokerages

Cryptocurrency trading has been a lucrative business for online brokerages in recent times. According to Robinhood’s Q3 2024 results, crypto trading volume and revenue soared by 112% and 165%, respectively, coming to $14.4 billion and $61 million.

Other Traditional Retail Brokerages Embracing Crypto

Morgan Stanley is not the only traditional retail brokerage considering adding cryptocurrency trading to its platform. Robinhood, Fidelity, and Interactive Brokers have already introduced crypto trading on their platforms. Charles Schwab reportedly plans to add crypto trading this year, according to Bloomberg.

Limitations of Cryptocurrency Trading on Traditional Platforms

While these traditional platforms offer cryptocurrency trading, the available tokens are generally more limited than on crypto-native centralized exchanges such as Coinbase. However, this is expected to change with the increasing adoption of cryptocurrencies by mainstream financial institutions.

Morgan Stanley’s Early Mover Advantage

Morgan Stanley has been an early mover in cryptocurrency compared to other traditional wealth managers. In August, the company authorized its 15,000 financial advisors to start recommending Bitcoin exchange-traded funds (ETFs) to clients. This move demonstrates Morgan Stanley’s commitment to cryptocurrency trading and its willingness to adapt to changing market conditions.

Cryptocurrency Trading Volume and Revenue: A Growing Trend

The increasing adoption of cryptocurrency trading by online brokerages is a growing trend that is expected to continue in the coming years. According to Robinhood’s Q3 2024 results, crypto trading volume and revenue soared by 112% and 165%, respectively, coming to $14.4 billion and $61 million.

Coinbase Clocks Record Revenues

Coinbase, one of the leading cryptocurrency exchanges, clocked revenues of $1.2 billion in the third quarter of 2024, primarily from its crypto trading businesses. This demonstrates the growing demand for cryptocurrency trading services and the potential for online brokerages to capitalize on this trend.

Early Mover Advantage: Morgan Stanley’s Commitment to Crypto

Morgan Stanley’s commitment to cryptocurrency trading is evident in its early mover advantage. The company has been at the forefront of adopting cryptocurrencies, demonstrating its willingness to adapt to changing market conditions. This move could potentially create a more favorable environment for cryptocurrency traders and increase adoption rates.

Conclusion

The potential addition of cryptocurrency trading to Morgan Stanley’s E-Trade platform is a significant development that could disrupt the cryptocurrency trading landscape. With Trump’s crypto-friendly stance and increasing demand for cryptocurrency trading services, online brokerages are expected to play a major role in shaping the future of cryptocurrencies.

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