Morgan Stanley Starts E*Trade Crypto Trading Pilot With 50 Basis Point Fee
Wall Street’s push into crypto has mostly come through exchange-traded funds. This week Morgan Stanley went a step further. The bank has begun letting a group of E*Trade customers buy and sell crypto directly, and it is charging less than the best-known retail platforms to do it.
Bloomberg first reported the move on Wednesday, and outlets including The Block and CoinDesk followed. The service is running as a pilot for now. Morgan Stanley expects to open it to all 8.6 million E*Trade clients later this year.
What the pilot offers
Pilot users pay 50 basis points, or 0.5%, on the dollar value of each crypto trade. That undercuts the published pricing of several competitors. According to Bloomberg figures cited by CoinDesk, Coinbase, Robinhood and Charles Schwab charge between 60 and 95 basis points for comparable retail trades, with Schwab at 75.
The plan has been public for months. In September 2025, a Morgan Stanley spokesperson told Reuters that E*Trade clients would be able to buy bitcoin, ether and solana in the first half of 2026, according to Cointelegraph. The infrastructure comes from Zerohash, a Chicago-based firm that handles crypto trading, custody and settlement for financial institutions. Morgan Stanley took part in a $104 million funding round for Zerohash last year that valued the company at $1 billion.
Jed Finn, who runs Morgan Stanley’s wealth management business, framed the launch as more than a price cut. “This is much bigger than trading crypto at a cheaper rate,” he said, describing the strategy as “disintermediating the disintermediators.” In plain terms, the bank wants clients who currently open separate accounts at crypto exchanges to keep those assets inside Morgan Stanley instead.
Part of a broader crypto build-out
The trading pilot is the latest in a series of crypto moves from the bank this year. On April 8, Morgan Stanley launched MSBT, a low-cost spot bitcoin ETF, citing growing client interest. The Block reports that the fund took in $103 million in net inflows in its first six trading days and has since passed $205 million in assets. In April the bank’s investment arm also launched a stablecoin reserves fund designed to meet the requirements of last year’s GENIUS Act, holding cash and short-dated U.S. Treasuries.
People familiar with the bank’s plans told Bloomberg it is also considering letting clients convert crypto holdings into exchange-traded product shares without selling them first, and adding tokenized equity trading on the institutional side in the second half of 2026. Those plans have not been formally announced and should be treated as reported.
The bank’s guidance on how much clients should hold has shifted too. Last October Morgan Stanley said it would recommend crypto allocations of up to 4% in its most aggressive portfolios, putting it in line with BlackRock and Fidelity.
Pressure on fees across the industry
For crypto exchanges, the risk is less about one bank and more about where pricing goes next. Retail trading fees remain a major revenue line. Coinbase reported $3.32 billion in consumer transaction revenue in 2025, and Robinhood reported close to $1 billion in crypto-related revenue, according to CoinDesk. If large brokerages are willing to offer crypto at lower margins as a way to win and keep wealth clients, standalone platforms may have to defend their pricing or lean harder on services the banks do not yet offer.
Bloomberg ETF analyst Eric Balchunas wrote on X that Schwab “likely won’t let this stand.” He also pointed out that bitcoin ETFs can trade for around two basis points, which means funds may still be the cheaper route for many investors. Balchunas said he still sees ETFs as “the way bigger cash magnet at least for now.”
The timing is notable. Coinbase reports first quarter earnings on Thursday, and investors will be watching how its retail volumes and fees are holding up as traditional brokerages expand into its core business.
Why it matters
Direct crypto trading at one of the largest U.S. wealth managers marks a change from even a few years ago, when most big banks kept crypto at arm’s length because of regulatory uncertainty. Supervisory guidance in Washington has eased since then, and banks have moved from offering exposure through funds to offering the assets themselves.
For everyday investors, the practical difference is choice. E*Trade customers will be able to hold bitcoin, ether and solana alongside their stocks and bonds, under a familiar brand, rather than moving money to a separate exchange. For the crypto market, the bigger question is whether bank distribution brings in new buyers or simply moves existing ones from one platform to another.
Market conditions were supportive when the news broke. Bitcoin topped $81,000 on Wednesday, according to CoinDesk, extending a rebound that has lifted it to its highest levels since January. Morgan Stanley has not said exactly when the pilot will widen or whether tokens beyond the first three will follow. When the partnership was announced last year, Cointelegraph reported that Zerohash was also set to build a full wallet product for E*Trade clients.