Morgan Stanley’s E-Trade Plans to Offer Cryptocurrency Trading Services
E-Trade, an investment brokerage and electronic trading platform owned by Morgan Stanley (NYSE: MS), is considering offering cryptocurrency trading services. The Information reported on January 2 that sources confirmed E-Trade's plans to introduce crypto trading under the forthcoming Trump administration.
Acquired by Morgan Stanley for approximately $13 billion, E-Trade has evolved into a significant platform for stocks, mutual funds, bonds, ETFs, IPOs, options, and pre-built portfolios. The platform has already entered the cryptocurrency sector by providing access to spot Bitcoin and Ethereum ETFs, which received approval from the US SEC in 2024.
Reasons for E-Trade's Crypto Service Offerings
The cryptocurrency sector has disrupted traditional finance in recent years, driven by institutional investments. Currently, the industry's total valuation exceeds $3.5 trillion, primarily led by Bitcoin and Ethereum.
Bitcoin has outperformed many traditional investment products, prompting increased interest from institutional and retail investors seeking digital assets as protection against inflation and fiat devaluation. For example, MicroStrategy Inc. (NASDAQ: MSTR) acquired nearly half a million Bitcoins, resulting in a stock market rally of over 381 percent in 2024. Other publicly traded companies, including Metaplanet Inc. (Tokyo: 3350), have followed suit, experiencing similar stock growth.
In contrast, Morgan Stanley's stock gained only about 37 percent in 2024. Expanding into crypto trading through E-Trade could enhance MS stock performance over time.
Morgan Stanley aims to expand its business in the crypto space under the anticipated Trump administration, which is expected to adopt a favorable regulatory stance towards cryptocurrencies. Trump has nominated pro-crypto SEC chair Paul Atkins and made notable investments in the crypto industry through World Liberty Financial (WLFI).
Market Impact
If E-Trade enters the cryptocurrency market, it could significantly change the landscape. More investors would gain easier access to cryptocurrencies, enhancing overall liquidity in the digital asset market.
This move may also increase competition for legacy trading platforms like Coinbase Global Inc. (NASDAQ: COIN). E-Trade benefits from extensive regulation and backing by Morgan Stanley's established reputation.
Ultimately, investors will benefit from seamless access to crypto trading services across various platforms.