As an analyst with over two decades of experience in financial markets, I’ve witnessed the evolution of traditional finance into the digital age. The news about Morgan Stanley considering adding cryptocurrency trading to its E-Trade platform is a testament to this transformation.
Having worked closely with wealth managers during my career, it’s clear that the industry is increasingly recognizing the potential of crypto assets. Trump’s promised regulatory environment seems to be a significant factor in their decision-making process. However, it’s essential to remember that while regulations can pave the way for growth, they must also ensure investor protection and market stability.
The move by Morgan Stanley could potentially shake up the current landscape, with incumbents like Coinbase facing competition from traditional players. It’s interesting to see how the lines between traditional finance and crypto are blurring further.
Looking back at my career, I remember when I first heard the term “cryptocurrency” – it was a distant concept, far removed from the world of Wall Street. Today, it’s becoming as mainstream as stocks and bonds. It’s like going from dial-up internet to broadband – it’s not just faster; it’s a whole new ball game.
To put things in perspective, let me share a joke: Why did Bitcoin cross the road? To get to the other hash function! I hope you found that as amusing as I did when I first heard it during a blockchain conference. It’s a reminder that even in finance, humor can help us keep our cool amidst all the change and complexity.
According to a recent report by The Information, financial giant Morgan Stanley, known for managing substantial global assets, is contemplating the integration of cryptocurrency trading within its E-Trade digital brokerage service.
According to reports, the wealth manager is said to have considered a more welcoming cryptocurrency regulatory climate potentially under U.S. President-elect Donald Trump as one of his major factors.
Trump has pledged to choose regulators who are supportive of industries to head crucial administrative bodies, with ambitions to establish the United States as a global leader in cryptocurrencies.
The proposed changes will likely see E-Trade become a significant player in the crypto trading market among conventional brokerages, possibly posing significant competition against existing leaders like Coinbase.
In the year 2020, Morgan Stanley acquired E-Trade. The combined 5.2 million accounts of this brokerage service are estimated to be worth around $360 billion, according to reports.
Brokerages embrace crypto
Apart from the more established brokerage platforms that provide cryptocurrency trading such as Robinhood, Fidelity, and Interactive Brokers, it’s been reported by Bloomberg that Charles Schwab is planning to join them in offering this service in the current year.
On platforms like these, the number of available tokens is usually smaller compared to decentralized exchanges that specialize in cryptocurrencies, such as Coinbase.
Cryptocurrency trading has proven to be a highly profitable sector for internet-based brokerages, as demonstrated by Robinhood’s Q3 2024 financial report. This data indicates that the volume of cryptocurrency trades and the associated revenue experienced an impressive increase of 112% and 165%, respectively, compared to the same period last year. Specifically, the trading volume reached a staggering $14.4 billion, while crypto revenue amounted to $61 million.
In June, Robinhood reached an agreement for a $200 million purchase of the Bitstamp cryptocurrency trading platform. This acquisition is intended to empower Robinhood to cater to institutional investors within the U.S. market.
In Q3 of 2024, Coinbase, the current market leader, reported earnings of approximately $1.2 billion, mainly derived from its cryptocurrency trading operations.
This way, the sentence is more conversational and easier to understand for a general audience.
Early mover
Morgan Stanley has been an earlier mover in crypto compared to other traditional wealth managers.
Starting in August, Morgan Stanley granted permission for their 15,000 financial advisors to suggest Bitcoin ETFs to their clients, according to someone knowledgeable about the situation, as reported by CryptoMoon.
In the United States, Morgan Stanley, a leading wealth management firm, oversees approximately $3.75 trillion through its extensive network of advisors. This figure includes a staggering $1 trillion that clients handle themselves.
As an analyst, I’ve been advocating for two notable Bitcoin Exchange-Traded Funds: BlackRock’s iShares Bitcoin Trust (IBIT) and Fidelity’s Wise Origin Bitcoin Fund (FBTC). These funds, being top-tier in the Bitcoin ETF market, are often referred to as “blue chips.
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2025-01-02 23:05