The influx of investments in U.S.-traded spot Bitcoin ETFs has surged to approximately $59.7 billion, with BlackRock’s IBIT holding assets worth $66.7 billion.
Both Morgan Stanley and Charles Schwab are advancing direct cryptocurrency trading capabilities within conventional brokerage accounts, motivated by existing client demand that is being met through external platforms like Coinbase or Robinhood. This shift highlights the fact that 20% of Schwab’s clients already engage with U.S. spot crypto exchange-traded products, indicating a significant internal market potential.
The ETF era posed a challenge as these financial instruments allowed exposure to Bitcoin within traditional accounts while trading activities remained external. For example, when a Schwab client holds IBIT and trades Bitcoin on Coinbase, Schwab retains the assets under management while losing the trading relationship to another platform.
An infographic emphasizes that Schwab’s 20% share of U.S. spot crypto ETPs underscores why these brokerages are confident in existing demand within their platforms.
Both firms have strategically timed their moves amidst a decline in pure-play crypto models, as evidenced by Robinhood reporting a 48% year-over-year drop in app crypto notional volume to $24 billion, and crypto revenue down 47%. Launching during this period allows firms to iron out compliance and service issues before retail interest potentially increases.
Regulatory developments have provided the necessary environment for these initiatives. In March 2025, the FDIC lifted its prior-approval requirement for certain crypto activities, while in May 2025, the OCC clarified that national banks could engage with customer-custodied crypto if proper risk management protocols are followed. Further regulatory clarity arrived in April 2026 when SEC staff released an interim statement on broker-dealer registration issues related to crypto interfaces.
The visible push in 2026 is the culmination of a longer-term infrastructure project. Morgan Stanley initiated its E*Trade crypto plan in September 2025, aiming for a launch in early 2026 via Zerohash. Schwab’s rollout included custody at Charles Schwab Premier Bank and execution through Paxos, starting with Bitcoin and Ethereum.
This trend is not limited to these two brokerages; other financial giants like Standard Chartered, Goldman Sachs, JPMorgan, and Fidelity have also moved towards integrating crypto capabilities. These moves indicate a consensus that crypto services should be part of the broader financial infrastructure.
If ETF inflows continue their recovery—as seen in May with over $1.6 billion registered for Bitcoin ETFs—and clients begin incorporating crypto similarly to equities, firms like Schwab and Morgan Stanley stand to gain trading revenue and deepen client relationships. Schwab has plans to expand offerings beyond Bitcoin and Ethereum.
Citi’s 12-month target for Bitcoin is at $112,000, with a bull case of $165,000. However, if regulatory challenges persist or retail engagement remains low, direct crypto trading may only serve as an essential feature for retaining existing clients.
In conclusion, Schwab and Morgan Stanley are proactively building infrastructure to capture the next wave of retail crypto demand, recognizing that client behavior indicates a strong desire for integrated crypto services. The firms that establish this access early will likely dominate when the demand peaks.