Morgan Stanley expands crypto trading pilot on E*Trade for U.S. retail clients

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Morgan Stanley launches crypto trading on E*Trade

Highlights

Morgan Stanley pilots spot crypto trading on E*Trade, charging clients 50 basis points per trade compared to Charles Schwab's 75 basis points.
The MSBT spot bitcoin ETF amassed over $205 million in assets since launch, recording $103 million net inflows in its first six trading days.
Morgan Stanley plans to allow direct crypto-to-ETF share conversions, add tokenized equity trading for institutions later this year, and recently launched a stablecoin reserves fund.

E*Trade rollout and pricing strategy

As first reported by Bloomberg, Morgan Stanley is charging clients 50 basis points on the dollar value of each crypto trade as it tests spot trading on E*Trade. The bank is using the rollout to deepen its retail digital-asset offering after years of limited exposure to the sector.

Jed Finn, head of wealth management at Morgan Stanley, says the move is part of a broader strategy rather than only a pricing play. He describes the effort as "disintermediating the disintermediators," signaling that the bank wants a larger direct role in how clients access crypto markets.

Bloomberg senior ETF analyst Eric Balchunas says the fee compares with Charles Schwab's 75 basis points, and he suggests Schwab is unlikely to leave that pricing unanswered. He also notes that bitcoin ETFs can trade at around 2 basis points, while direct ownership avoids ongoing fund expense ratios.

Broader digital-asset expansion and market impact

Morgan Stanley is building out a wider crypto and tokenized-assets platform alongside the E*Trade pilot. The bank largely avoids the crypto market until last October, when it says it would recommend capping crypto allocations at up to 4% in its most aggressive client portfolios, a step that brings it closer to firms such as BlackRock and Fidelity.

Weeks before the retail trading pilot, the bank launches its low-cost spot bitcoin ETF, MSBT, citing growing client interest in crypto. The fund records $103 million in net inflows in its first six trading days and has since accumulated more than $205 million in assets under management, according to The Block's data dashboard.

According to people familiar with the matter cited by Bloomberg, Morgan Stanley is also planning to let clients convert cryptocurrency into shares of exchange-traded products without first selling the digital assets. On the institutional side, the bank intends to add trading in tokenized equities in the second half of this year, while its investment unit launched a stablecoin reserves fund last month that invests in cash and U.S. Treasury instruments with maturities of 93 days or less.

Our earlier article on Morgan Stanley’s E*Trade crypto trading launch outlined the bank’s plan to roll out Bitcoin and other cryptocurrency trading to clients with a 0.50% per-transaction commission, starting as a pilot and expanding to E*Trade’s broader user base over time. We also noted that the move followed the debut of Morgan Stanley’s spot Bitcoin ETF, MSBT, and framed both initiatives as part of Wall Street’s deeper integration with digital assets through more familiar brokerage access and competitive pricing.

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