Morgan Stanley has officially entered the retail crypto trading space by launching crypto services through E*Trade with a flat 0.5% trading fee, positioning itself below competitors such as Coinbase, Charles Schwab, and Fidelity Investments.
The pilot program went live on May 6 and currently supports trading for Bitcoin, Ethereum, and Solana directly within E*Trade brokerage accounts. Infrastructure provider Zerohash is handling custody, settlement, and liquidity operations for the service.
With a fee structure of 50 basis points per trade, Morgan Stanley is undercutting major rivals in the retail crypto market. Charles Schwab currently charges around 75 basis points for spot crypto trading, while Fidelity Investments fees are estimated near 1%. Although Robinhood advertises commission-free crypto trading, users still face spreads that can range from 35 to 95 basis points. Meanwhile, retail fees on Coinbase can exceed 0.5% depending on the transaction method and account tier.
ETF analyst Eric Balchunas suggested that competitors are unlikely to ignore the aggressive pricing move and predicted a broader fee compression trend across the crypto brokerage industry, similar to the price wars previously seen in the Bitcoin ETF market.
Unlike crypto ETFs or managed products, the new E*Trade service offers clients direct ownership of digital assets rather than indirect exposure through funds. However, staking functionality is not yet available during the pilot phase. Zerohash manages all backend infrastructure, meaning users do not directly control private keys themselves.
The launch forms part of a broader digital asset strategy by Morgan Stanley. Earlier this year, the bank introduced the MSBT Bitcoin ETF with a competitive 0.14% expense ratio, reportedly attracting over $100 million in inflows shortly after launch.
The firm is also developing a proprietary digital wallet expected to arrive later in 2026. The wallet is designed to support cryptocurrencies alongside tokenized traditional assets such as stocks, bonds, and real estate.
In parallel, Morgan Stanley is reportedly seeking an OCC national trust bank charter that would allow the bank to offer direct crypto custody and staking services.
The scale of the rollout could significantly reshape the US retail crypto market. E*Trade has approximately 8.6 million users, all of whom are expected to gain access to crypto trading later in 2026. Combined with Morgan Stanley’s network of roughly 16,000 financial advisors overseeing trillions in client assets, the move gives the bank a distribution advantage that many crypto-native platforms may struggle to match.
