Morgan Stanley to Launch Crypto Trading on E-Trade by 2026

Morgan Stanley crypto trading expansion enables 7 million E-Trade customers to directly own digital assets through regulated platform

Key Takeaways

• Morgan Stanley launches crypto trading on E-Trade in first half of 2026 through partnership with infrastructure startup Zerohash, marking a major Wall Street expansion into digital assets for retail customers.
• $104 million funding raised by Zerohash from investors including Morgan Stanley reflects growing institutional investment in crypto backend technologies bridging traditional finance and blockchain services.
• Direct ownership of bitcoin, ether, and Solana planned with Morgan Stanley developing custodial wallet capabilities, moving beyond previous indirect exposure through ETFs and managed funds.

Introduction

Morgan Stanley prepares to offer cryptocurrency trading to retail customers through its E-Trade division, representing one of the most significant moves by a major Wall Street institution into digital assets. According to Bloomberg, the investment banking giant partners with Chicago-based startup Zerohash to provide liquidity, custody, and settlement services for crypto trading on the E-Trade platform.

This strategic expansion comes after Morgan Stanley acquired the online brokerage in 2020 and follows the firm’s gradual entry into the crypto space. The initiative positions Morgan Stanley to compete directly with fintech disruptors while leveraging its established retail brokerage infrastructure to serve mainstream investors seeking digital asset exposure.

Key Developments

The collaboration enables E-Trade users to trade cryptocurrencies including bitcoin, ether, and Solana through a partner model launching in the first half of 2026. Morgan Stanley’s approach focuses on direct ownership of digital assets rather than the indirect exposure through ETFs and managed funds it previously offered to wealthy clients.

Zerohash secured $104 million in funding from investors including Morgan Stanley, reflecting increased investment in crypto infrastructure technologies. The startup provides the backend technology necessary for traditional financial institutions to offer digital asset services while maintaining regulatory compliance.

The firm plans to develop wallet capabilities that position Morgan Stanley as a custodian for clients’ digital assets. This custody model represents a departure from third-party management structures and gives the bank direct control over the client experience while potentially reducing associated fees.

Market Impact

The announcement signals broader institutional confidence in cryptocurrency as an asset class worthy of mainstream brokerage integration. Morgan Stanley’s wealth management division, which accounts for nearly half of the firm’s revenue, gains enhanced product offerings to attract and retain clients seeking diversified portfolios.

Crypto futures trading on E-Trade carries a $1.50 commission per contract, per side, with trading available nearly 24 hours a day, six days a week. This pricing structure and accessibility reflects the continuous nature of digital asset markets and competitive pressure from existing crypto-native platforms.

Industry analysts characterize the move as a watershed moment that could accelerate adoption by other major brokerages. The integration demonstrates how regulatory clarity shapes product development and investor access in the digital asset space.

Strategic Insights

Morgan Stanley’s expansion beyond simple crypto trading encompasses tokenization of traditional financial assets, which executives believe will significantly disrupt the wealth management industry. Tokenized assets like cash begin paying interest immediately upon entering digital wallets, creating operational efficiencies that traditional settlement systems cannot match.

The firm’s focus on regulated products including CME-traded futures and spot exchange-traded products aims to mitigate custody risks while meeting regulatory expectations. This approach balances client demand for digital asset access with institutional risk management requirements.

The initiative positions Morgan Stanley among the first major brokerages to offer comprehensive crypto services at scale, potentially capturing significant market share in the rapidly growing digital asset investment sector. The bank’s established client relationships and regulatory standing provide competitive advantages over crypto-native platforms.

Expert Opinions and Data

Jed Finn, head of wealth management at Morgan Stanley, describes the crypto trading launch as just the beginning of broader digital asset integration. “Offering clients the ability to trade crypto is the tip of the iceberg,” Finn states, emphasizing the transformative potential of distributed ledger technology beyond simple investment products.

Andy Saperstein, co-president of Morgan Stanley Wealth Management, characterizes digital assets as “a massive opportunity” for the firm. “Clients are increasingly seeking access to new investment categories including digital assets,” Saperstein explains. “The E-Trade platform provides a natural channel to serve this demand through a regulated and secure environment.”

Finn highlights tokenization’s efficiency advantages, noting that tokenized cash assets start generating returns immediately compared to traditional settlement delays. “We see immense power in the cryptocurrency space, not just with crypto as an investment for our clients, but also around DLT and tokenization more broadly,” he emphasizes.

Conclusion

Morgan Stanley’s entry into retail crypto trading through E-Trade represents a fundamental shift in how traditional financial institutions approach digital assets. The partnership with Zerohash demonstrates the infrastructure development necessary for established banks to compete in the evolving digital asset landscape.

The firm’s emphasis on custody capabilities and tokenization suggests this initiative extends far beyond simple cryptocurrency trading. Morgan Stanley positions itself at the forefront of institutional digital asset adoption while maintaining the regulatory compliance and risk management standards expected from traditional wealth management firms.