E*Trade to add Bitcoin, Ether, Solana in Morgan Stanley’s crypto expansion
News Summary
Morgan Stanley's E*Trade is set to launch cryptocurrency trading in the first half of 2026, initially offering Bitcoin (BTC), Ether (ETH), and Solana (SOL) for purchase. This expansion is facilitated by a partnership with digital asset infrastructure provider Zerohash, which recently secured $104 million in funding at a $1 billion valuation, with Morgan Stanley also participating in the round. This move signifies Wall Street's deepening foray into digital assets, bolstered by supportive legislation from the Trump administration. Morgan Stanley has already permitted its wealth advisors to pitch spot Bitcoin ETFs to eligible clients and is exploring the transactional aspects of crypto. The development also intensifies competition with rivals like Robinhood, which has rapidly expanded its crypto offerings.
Background
Morgan Stanley acquired discount brokerage ETrade in 2020 for $13 billion. At the time, ETrade served over 5.2 million users, primarily offering a retail-focused platform for trading regulated financial securities to US residents. Zerohash, the digital asset infrastructure provider for this initiative, specializes in offering crypto trading, tokenization, and stablecoin infrastructure to financial institutions and blockchain adopters. The company recently raised $104 million at a $1 billion valuation in a round led by Interactive Brokers, underscoring its growing significance in the digital asset infrastructure space. The Trump administration's GENIUS Act, which established a comprehensive framework for stablecoin issuers, has provided a supportive regulatory backdrop for Wall Street institutions to embrace cryptocurrencies.
In-Depth AI Insights
What are the deeper strategic implications of Morgan Stanley's direct retail crypto offering for the competitive landscape of traditional finance and fintech? Morgan Stanley's move, via E*Trade, signals that major traditional financial institutions are not merely dipping their toes but are building out comprehensive retail crypto solutions, indicating a long-term commitment to the digital asset market. This will further legitimize cryptocurrencies for a broader, potentially more conservative investor base, leveraging the trust associated with established brands. It will intensify competition with native crypto platforms like Coinbase and fintechs such as Robinhood, potentially forcing market consolidation or greater specialization among players. Furthermore, Morgan Stanley's investment in Zerohash highlights an 'infrastructure-first' strategy in digital assets, seeking to gain influence by controlling underlying technology. How does the Trump administration's regulatory stance, particularly the GENIUS Act, influence Wall Street's accelerated adoption of cryptocurrencies? The GENIUS Act provides clear regulatory clarity for stablecoin issuance, significantly reducing legal and compliance risks for financial institutions, which has been a major barrier to institutional entry into the crypto space. Its passage, alongside the Trump administration's overall posture, signals a supportive rather than adversarial environment for digital assets, encouraging institutional investment and product development in crypto. This regulatory certainty not only helps reinforce the US dollar's global dominance (via regulated USD stablecoins) but could also pave the way for further legislative action to integrate crypto more deeply into the traditional financial system, thereby reducing market uncertainty. Beyond direct crypto trading, what broader digital asset strategies might Morgan Stanley and other incumbents pursue, and what does this signify for the asset tokenization trend? Direct crypto trading is merely an entry point. Morgan Stanley CEO Ted Pick's comments about exploring the transactional side of crypto suggest institutions are looking at deeper blockchain applications, such as leveraging distributed ledger technology for instant settlement and tokenization of securities, real estate, or other assets. Institutions will likely push for tokenization at the wholesale level, optimizing capital markets through the issuance of institutional stablecoins or digital bonds. Moreover, given the capabilities of infrastructure providers like Zerohash, we could see more institutions innovating traditional business lines like asset management, cross-border payments, and supply chain finance using blockchain technology, driving efficiency, reducing costs, and opening new revenue streams. This indicates a shift from conceptual discussions to large-scale practical applications of asset tokenization.