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Morgan Stanley and Charles Schwab are pushing direct crypto trading into traditional brokerage accounts as U.S. spot Bitcoin ETF inflows reach roughly $59.7 billion. BlackRock’s IBIT alone holds $66.7 billion in assets, showing how quickly Bitcoin exposure has moved into traditional investment accounts.
The ETF boom gave investors Bitcoin exposure inside familiar brokerage accounts. Still, spot crypto trading often moved to Coinbase, Robinhood, and other platforms. That split created a clear business challenge. Brokerages could hold client assets while losing trading revenue and client behavior data elsewhere.
Schwab’s case shows why timing matters. Its clients already hold about 20% of U.S. spot crypto exchange-traded products, giving the firm a large built-in demand base.
A Schwab client can hold IBIT in one account, then trade spot Bitcoin on Coinbase. In that setup, Schwab keeps the asset relationship, while Coinbase captures the trading activity. Morgan Stanley faces a similar issue through E*Trade. The platform has 8.6 million self-directed clients, $1.67 trillion in assets, and 1.029 million average daily revenue trades in 2025.
Both firms are expanding their crypto offerings as app-based crypto platforms face weaker activity. Robinhood reported first-quarter crypto notional volume of $24 billion, down 48% year over year. Its crypto revenue also fell 47%, showing softer retail demand. That slowdown gives large brokerages time to build before another broad retail cycle returns.
Crypto infrastructure carries fixed costs in any market. Therefore, a quieter period allows compliance, pricing, and service teams to solve product issues before demand grows again.
The regulatory backdrop also gave firms more room to build. The FDIC removed its prior-approval requirement for permissible crypto activities in March 2025.
Then, in May 2025, the OCC clarified that national banks may buy and sell customer-custodied crypto. Banks may also outsource execution with proper risk controls. In April 2026, the SEC staff issued an interim statement on broker-dealer registration issues for certain crypto interfaces. Congress still has work ahead on the CLARITY Act.
Morgan Stanley’s E*Trade crypto plan began in September 2025. The firm targeted a first-half 2026 launch through Zerohash. Schwab came with a broader institutional setup. Its model includes custody at Charles Schwab Premier Bank, execution through Paxos, education tools, and a phased launch.
The first phase focuses on Bitcoin and Ethereum. Over time, Schwab intends to add more assets and transfer capability. The same pattern now extends across finance. Standard Chartered launched institutional spot Bitcoin and Ethereum trading in July 2025.
Goldman Sachs filed for its first Bitcoin ETF in April 2026. JPMorgan also began exploring institutional crypto trading in December 2025. Fidelity received OCC approval in February 2026 for bank-based crypto custody and execution. Together, these moves place custody, execution, and access closer to traditional market systems.
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If ETF inflows keep recovering, brokerages could gain more trading revenue and keep clients inside their platforms. Bitcoin ETFs registered more than $1.6 billion in inflows in May.
Citi’s 12-month Bitcoin target stands at $112,000, with a bull case of $165,000. Direct access lets brokerages capture demand as crypto use broadens. The bear case remains clear. Schwab’s launch starts with only Bitcoin and Ethereum, while transfers remain unavailable and unavailable in New York and Louisiana.
If Congress stalls on the CLARITY Act, the Fed stays restrictive, and retail demand stays thin, direct crypto trading may end up becoming just a standard account feature. Citi’s bear case places Bitcoin at $58,000. Standard Chartered has flagged a possible drop to $50,000, while Bitcoin is already down roughly 7% year to date.
Morgan Stanley and Charles Schwab are moving closer to direct crypto trading as Bitcoin ETF demand grows inside brokerage accounts. The shift aims to keep client assets, trading activity, and market data within their platforms as regulatory conditions improve and traditional finance expands crypto access.
