Three of the largest U.S. retail brokerages — Charles Schwab, Fidelity Investments, and Morgan Stanley's E\*TRADE — now offer or are actively rolling out direct spot cryptocurrency trading to a combined client base exceeding 90 million accounts. Schwab began its phased launch on April 16, 2026, o...
"I think the cryptocurrency business will be accretive, but we've already won over these clients even without it." — Rick Wurster, CEO, Charles Schwab
Three of the largest U.S. retail brokerages — Charles Schwab, Fidelity Investments, and Morgan Stanley's E*TRADE — now offer or are actively rolling out direct spot cryptocurrency trading to a combined client base exceeding 90 million accounts. Schwab began its phased launch on April 16, 2026, opening Bitcoin and Ethereum access to 38.9 million active brokerage accounts at 75 basis points per trade. Fidelity has offered crypto trading since 2023, currently supporting five tokens at a 1% spread. Morgan Stanley's E*TRADE has disclosed plans for Bitcoin, Ethereum, and Solana trading in the first half of 2026 via infrastructure provider Zerohash.
Separately, Morgan Stanley launched MSBT, the first spot Bitcoin ETF issued by a major U.S. bank, on April 8. The fund drew $34 million on day one and crossed $100 million in assets within its first week, undercutting BlackRock's IBIT on fees at 14 basis points versus 25.
The aggregate effect is structural: direct crypto ownership is migrating from specialist platforms (Coinbase, Robinhood) into the same account interfaces where tens of millions of Americans already hold equities, bonds, and retirement assets. The fee compression and distribution advantages of incumbent brokerages pose a measurable competitive threat to crypto-native platforms that have historically commanded higher transaction margins.
Charles Schwab announced Schwab Crypto on April 16, 2026, beginning a phased rollout of direct Bitcoin and Ethereum spot trading across its retail platform. The service is available through Schwab.com, Schwab Mobile, and the thinkorswim trading platform — the same interfaces used by clients to trade equities, options, and fixed income.
Key parameters:
Schwab reported that visits to its crypto platform increased 90% year-over-year prior to launch, according to CEO Rick Wurster. The firm already held approximately 20% of spot crypto exchange-traded product assets through its brokerage platform before offering direct trading.
The structural significance lies in the account architecture. Schwab clients maintain a separate crypto account linked to their existing brokerage account, enabling side-by-side viewing of traditional and digital assets within a single portfolio interface. This removes the friction of opening a separate account at a crypto-native platform — a step that historically deterred a substantial portion of traditional investors.
Morgan Stanley is pursuing crypto exposure through two simultaneous vectors: an ETF product and direct retail trading.
MSBT — The Bank-Issued Bitcoin ETF: On April 8, 2026, Morgan Stanley launched the Morgan Stanley Bitcoin Trust (MSBT) on NYSE Arca. It is the first spot Bitcoin ETF issued directly by a major U.S. bank, as opposed to asset managers like BlackRock or Fidelity. MSBT charges 14 basis points — the lowest fee in the spot Bitcoin ETF market, undercutting BlackRock's IBIT (25 basis points) and Fidelity's FBTC (25 basis points). The fund attracted $33.9 million on its first trading day and exceeded $100 million in AUM within its first week. Bloomberg ETF analyst Eric Balchunas placed the launch in the top 1% of all ETF debuts and projected $5 billion in AUM within year one.
E*TRADE Direct Trading: Morgan Stanley plans to enable direct cryptocurrency trading on the E*TRADE platform in the first half of 2026. The service will support Bitcoin, Ethereum, and Solana. Infrastructure and trade execution will be handled by Zerohash, which recently raised $104 million at a $1 billion valuation. Morgan Stanley is also a direct investor in Zerohash. E*TRADE's self-directed channel held $1.67 trillion in client assets as of 2025, serving more than 8 million households.
Morgan Stanley has additionally filed for Ethereum and Solana trusts and disclosed plans for a crypto-inclusive asset allocation strategy with suggested portfolio weightings.
Fidelity Investments entered crypto earlier than its peers and has built the most extensive offering among traditional brokerages:
Fidelity's Bitcoin ETF, the Wise Origin Bitcoin Fund (FBTC), holds $12.8 billion in AUM and approximately 187,813 BTC as of early March 2026. Its Ethereum Fund (FETH) adds over $1.3 billion. Combined Q1 2026 net inflows across both funds totaled $4.1 billion.
With over $17.5 trillion in total assets under administration and $5.9 trillion in AUM, Fidelity brings distribution scale that few crypto-native platforms can match. Its decision to support Solana and Litecoin also signals a willingness to extend beyond the BTC/ETH duopoly that Schwab has initially adopted.
The entry of traditional brokerages into direct crypto trading is producing measurable fee compression. A comparison of current fee structures across platforms:
| Platform | Fee Structure | BTC/ETH | Additional Coins | |----------|-------------|---------|-----------------| | Schwab Crypto | 0.75% per trade | Yes | No (at launch) | | Fidelity Crypto | 1.00% spread | Yes | LTC, SOL, FIDD | | E*TRADE (planned) | TBD | Yes | SOL | | Coinbase | Variable; Advanced: 0-0.60% maker-taker | Yes | 200+ | | Robinhood | Spread-based (~0.45-0.50%) | Yes | 15+ |
For context, Schwab charges $0 for equity and ETF trades. Fidelity similarly charges $0 for stocks. The 75-100 basis point crypto fee reflects a premium for a new asset class, but it is meaningfully lower than the fees many retail investors pay on Coinbase's standard platform (which can exceed 1.5% on smaller trades).
Morgan Stanley's MSBT ETF fee of 0.14% represents a separate but related compression vector. As of April 7, 2026, U.S. spot Bitcoin ETFs held $88.71 billion in total net assets, with BlackRock's IBIT accounting for approximately $54.5 billion.
The brokerage migration into crypto creates a two-sided competitive pressure on crypto-native platforms.
Distribution disadvantage: Coinbase reported approximately 110 million verified users globally, but the figure includes inactive accounts. Robinhood reported 24.3 million funded accounts. By contrast, Schwab alone has 38.9 million active brokerage accounts, and these are accounts already holding assets — not sign-ups.
Revenue risk: Coinbase generated approximately $420 million in transaction revenue through February 10 of Q1 2026, with subscription and services revenue projected between $550 million and $630 million for the quarter. Robinhood posted 52% year-over-year revenue growth in 2025, the fastest among publicly traded U.S. brokerages. Both platforms depend heavily on crypto trading fees. Schwab's entry at 75 basis points, combined with its existing $0 equity trading, creates a single-platform value proposition that may draw marginal crypto buyers away from standalone crypto apps.
Strategic responses: Both Coinbase and Robinhood are diversifying. Coinbase began rolling out commission-free stock trading in January 2026, effectively mirroring brokerages in reverse. Robinhood is expanding into prediction markets, which became one of its fastest-growing business lines by revenue. Both are pursuing "financial super app" strategies that extend beyond crypto trading.
Bernstein analysts in April 2026 signaled a potential bottom for crypto equities heading into Q1 earnings, noting that Coinbase, Robinhood, and Figure were trading at steep discounts.
The three brokerages have adopted distinct custody models, each reflecting different risk and regulatory calculations:
Schwab: Two-tier custody with Charles Schwab Premier Bank (CSPB) as primary custodian and Paxos (OCC-regulated) providing sub-custody and execution. This keeps regulatory responsibility within the Schwab banking entity while outsourcing blockchain infrastructure.
Fidelity: Vertically integrated through Fidelity Digital Assets, its in-house subsidiary handling both custody and execution. Fidelity has operated its own Bitcoin mining and custody infrastructure since 2014, giving it the longest operational history among traditional financial firms.
Morgan Stanley / E*TRADE: Partnership with Zerohash for liquidity, custody, and operational support. For MSBT, Coinbase Custody serves as the custodian. Morgan Stanley's direct investment in Zerohash ($104 million round at $1 billion valuation) signals intent to maintain long-term infrastructure control.
The custody question carries material weight. The SEC's SAB 121 guidance, while softened, still influences how banks account for crypto held on behalf of clients. The OCC's April 2025 charter granted to Coinbase, and Paxos's existing OCC-regulated status, have created a pathway for brokerage-bank partnerships that satisfy both federal banking and securities regulators.
Several regulatory shifts in 2025-2026 enabled the brokerage convergence:
These moves collectively de-risked the compliance calculus for large, regulated financial institutions. The cost of not offering crypto — measured in client attrition and lost share of wallet — has now exceeded the regulatory and reputational risk of offering it.
The entry of Schwab, Fidelity, and Morgan Stanley into direct crypto trading marks a structural shift in the market for retail digital asset access. The competitive dynamics are straightforward: incumbent brokerages bring distribution scale (tens of millions of active, funded accounts), established trust relationships, and the ability to offer crypto alongside equities, bonds, and retirement products in a single interface. Crypto-native platforms bring deeper token selection, faster product iteration, and established on-chain infrastructure.
The likely outcome is market segmentation. Casual crypto exposure — a 2-5% Bitcoin or Ethereum allocation within a diversified portfolio — will increasingly flow through traditional brokerage accounts. Active trading, altcoin exposure, DeFi access, and on-chain activity will remain concentrated on crypto-native platforms. The economic value capture shifts accordingly: brokerages monetize through asset gathering and modest trading fees on large volumes; crypto-native platforms monetize through higher-margin services (staking, lending, advanced trading) for engaged users.
The data suggests this is not a zero-sum displacement but a market expansion. Schwab's 90% increase in crypto platform visits indicates latent demand among traditional brokerage clients who had not previously opened standalone crypto accounts. The total addressable market for retail crypto exposure is growing — the question is who captures which segment, and at what margin.