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Key Notes
- The platform's potential entry into crypto trading follows its successful integration of spot crypto ETFs, signaling growing institutional confidence in digital assets.
- Morgan Stanley aims to capitalize on the $3.5 trillion cryptocurrency market through E-Trade, following the success of companies like MicroStrategy in the digital asset space.
- The expansion aligns with anticipated crypto-friendly regulatory changes, potentially reshaping competition dynamics in the cryptocurrency trading platform landscape.
E-Trade, an investment brokerage and electronic trading platform backed by Morgan Stanley (NYSE: MS) is exploring plans to offer its customers a chance to trade cryptocurrency assets. The Information noted on Thursday, January 2, that people familiar with the matter confirmed that E-Trade is seeking to offer crypto trading services under the upcoming Trump administration.
Acquired by Morgan Stanley for about $13 billion, E-Trade has grown to a major trading platform for stocks, mutual funds, bonds, ETFs, IPOs, Options, and pre-built portfolios. Already, E-Trade has ventured into the cryptocurrency market by offering its customers access to the spot Bitcoin and Ethereum ETFs, which were approved by the US SEC in 2024.
Why E-Trade Would Offer Crypto Services Soon
The cryptocurrency industry has significantly disrupted the traditional financial system in the past few years, catalyzed by institutional investors. As of this writing, the cryptocurrency industry has grown to over $3.5 trillion in total valuation, led by Bitcoin and Ethereum.
With Bitcoin having outshone the majority of traditional investment products last year, more institutional and retail investors are keen to adopt digital assets as a hedge against inflation and ongoing fiat devaluation.
For instance, MicroStrategy Inc. (NASDAQ: MSTR) has purchased nearly half a million Bitcoins, which helped its stock market rally over 381 percent in 2024. Other publicly traded companies, led by Metaplanet Inc. (Tokyo: 3350), have been following in the footsteps of MicroStrategy and experienced a similar exponential growth in the stocks.
Morgan Stanley’s stock, however, performed dismally in 2024, after only gaining about 37 percent. The venture into crypto trading services through its subsidiary would significantly improve MS stock in the long term.
Morgan Stanley is keen to grow its business through the crypto business under the upcoming Donald Trump administration, which has signaled a friendly crypto regulatory approach. Moreover, Trump has already nominated a pro-crypto SEC chair, Paul Atkins, in addition to his notable investment into the crypto industry through World Liberty Financial (WLFI).
Market Impact
The potential entrance of Morgan Stanley’s E-Trade into the cryptocurrency industry will be a huge game changer in the long term. On one hand, more investors will seamlessly access the cryptocurrency industry, which will further enhance the overall liquidity of digital assets globally.
On the other hand, legacy crypto trading platforms, led by Coinbase Global Inc. (NASDAQ: COIN), will experience heightened competition over time. Moreover, E-Trade is heavily regulated and backed by reputable investors through Morgan Stanley.
Nonetheless, the ultimate winner will be investors who get a chance to access crypto trading services seamlessly through various platforms.
Disclaimer: Coinspeaker is committed to providing unbiased and transparent reporting. This article aims to deliver accurate and timely information but should not be taken as financial or investment advice. Since market conditions can change rapidly, we encourage you to verify information on your own and consult with a professional before making any decisions based on this content.
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