Morgan Stanley Rolls Out Crypto Trading on E*Trade for 8.6M Clients

Morgan Stanley has launched spot cryptocurrency trading on its ETrade platform. The move comes as part of a wider push into digital assets, including a bitcoin exchange-traded fund introduced in 2022. Early results show strong investor interest, with the fund gathering over $200 million in its first week. The bank began a live pilot for crypto trading on ETrade this month. Initially limited to a small group, the service will expand to all 8.6 million E*Trade clients later in 2024. Transactions carry a fee of 50 basis points, undercutting competitors like Charles Schwab, which charges 75 basis points.

Morgan Stanley also plans to let clients convert cryptocurrencies directly into shares of exchange-traded products. This feature avoids the need to sell holdings first, simplifying the process. Jed Finn, head of wealth management, described the strategy as 'disintermediating the disintermediators'. The bank’s push into crypto builds on its October 2022 launch of the Morgan Stanley Spot Bitcoin ETF (MSBT). Within six trading days, the fund attracted $205 million in assets under management. As the sixth-largest U.S. asset manager, the firm now offers both institutional and retail investors easier access to digital currencies.

The expansion of crypto services on E*Trade reflects growing demand for digital asset trading. With lower fees and direct conversion options, Morgan Stanley aims to streamline crypto investments for millions of clients. The bank’s early success with MSBT suggests further growth in this area.