Key Takeaway: Morgan Stanley’s comprehensive approach, combining trading, custody, and tokenization capabilities, could establish new standards for traditional financial institutions integrating digital assets. The partnership represents a significant milestone in the ongoing convergence of traditional finance and digital assets, potentially opening crypto markets to millions of E*Trade customers who previously had limited access to direct cryptocurrency trading through mainstream platforms.
Morgan Stanley announced plans to offer cryptocurrency trading through its E*Trade platform in partnership with digital asset infrastructure provider Zerohash, marking a significant expansion of Wall Street’s embrace of digital currencies.
The initiative, set to launch in the first half of 2026, will initially allow E*Trade customers to trade Bitcoin, Ethereum, and Solana directly through the platform. This represents a major evolution from Morgan Stanley’s previous crypto strategy, which relied on third-party fund managers to provide digital asset exposure to wealthy clients.
Strategic Partnership Details
“We are well underway in preparing to offer crypto trading through a partner model to E-Trade clients in the first half of 2026,” wrote Jed Finn, head of wealth management at Morgan Stanley, in an internal memo. The announcement positions Morgan Stanley as one of the first major Wall Street banks to offer direct cryptocurrency trading to retail customers through a mainstream brokerage platform.
Zerohash, which recently achieved unicorn status with a $1 billion valuation after raising $104 million in Series D funding, will provide crucial infrastructure including liquidity, custody, and settlement services. The Chicago-based company already serves major financial institutions including Interactive Brokers, Stripe, and BlackRock’s BUIDL Fund.
Beyond Trading: Comprehensive Digital Strategy
Morgan Stanley’s cryptocurrency ambitions extend far beyond simple trading capabilities. Finn emphasized that crypto trading represents merely “phase one” of the bank’s broader digital asset strategy, with plans to develop a comprehensive wallet solution allowing clients to manage both traditional and digital assets within a unified ecosystem.
“The underlying technology has been proven, and blockchain-based infrastructure is obviously here to stay,” Finn stated. “Clients should have access to digital assets, traditional investments, and cryptocurrencies within the same ecosystem they are familiar with”.
The bank is also exploring tokenization opportunities, which could revolutionize how traditional financial assets are managed and traded. “Tokenized alternatives for cash start generating interest as soon as they enter the wallet,” Finn explained. “Other asset classes will soon follow in pursuit of this efficiency”.
Market Context and Competition
The announcement comes as cryptocurrency markets have surged to approximately $3.9 trillion in total capitalization, with Bitcoin commanding around $2.25 trillion and Ethereum representing roughly $506 billion of that total. The timing aligns with increased institutional adoption following the Trump administration’s crypto-friendly regulatory approach.
Morgan Stanley faces competition from established players like Robinhood, which generated $626 million from cryptocurrency transactions in 2024, representing 21% of its total net revenue. Charles Schwab has taken a different approach, providing clients access to Bitcoin and Ethereum through exchange-traded funds rather than direct token trading.
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Morgan Stanley’s Crypto Evolution
The bank’s digital asset journey began in 2021 when it became the first major Wall Street institution to offer Bitcoin funds to wealthy clients through partnerships with Galaxy Digital and NYDIG. Initially, the bank required clients to have a minimum net worth of $2 million and limited investments to 2.5% of total assets.
In August 2024, Morgan Stanley allowed its approximately 15,000 financial advisors to proactively recommend Bitcoin ETFs to qualified clients, representing a shift from reactive to proactive crypto investment recommendations. Regulatory filings show the bank holds approximately $188 million in BlackRock’s iShares Bitcoin Trust as of June 2024.
Regulatory Environment Boost
The initiative benefits from a dramatically improved regulatory landscape under the Trump administration. President Trump signed Executive Order 14118 on January 23, 2025, establishing the President’s Working Group on Digital Assets Markets and directing comprehensive federal regulatory framework development.
The administration has also moved to create a Strategic Bitcoin Reserve using government-held Bitcoin from criminal forfeitures, providing Wall Street institutions with greater confidence to expand crypto offerings. Congress has advanced crypto-friendly legislation, including the GENIUS Act establishing stablecoin regulatory frameworks.
Industry Impact and Future Implications
“Every financial institution is looking to provide access to the crypto asset class and innovate with this technology at scale,” said Adam Berg, Zerohash’s Chief Financial Officer. “I’ve recently met with multiple large bank CEOs and financial services executives, many of whom said they are spending more than 50% of their time driving on-chain innovation”.
The move signals broader institutional validation of cryptocurrencies as legitimate assets. With crypto markets producing over 240,000 millionaires in 2025—a 40% increase year-over-year—institutional demand for comprehensive digital asset services continues growing.
Source: Reuters, Bloomberg