This month, news broke that Charles Schwab and E*Trade, the giant retail securities brokers, planned to build out their crypto trading franchises.
But can they catch up in a race for investors that started years ago? Analysts at Bernstein on Monday said probably not.
“Traditional firms have been slow to crypto while offering limited products,” wrote Guatam Chhugani and his two colleagues in a note to clients.
“We reckon this might end up being too little too late.”
Indeed, E*Trade, which is a unit of Morgan Stanley, the Wall Street investment bank, said it plans to launch crypto trading by 2026, according to Reuters.
For its part, Charles Schwab plans to offer spot trading for Bitcoin and Ethereum within the year, Bloomberg News reported.
Early movers
The development is the latest sign that traditional investment firms are preparing for a marketplace defined by new crypto laws and regulations under consideration in Congress and the Trump administration.
Yet Bernstein said that early movers that didn’t wait for regulation — Coinbase, Kraken, as well as Robinhood, the online brokerage — have the upper hand.
“By waiting for regulatory clarity, they have let them grab much of the market,” Bernstein wrote.
Still, E*Trade and Charles Schwab have the scale and depth to take market share from the early movers.
Schwab, based in Texas, has 37 million customers and manages a staggering $10 trillion in investor assets. And E*Trade, which has more than 5 million customers, can draw on the resources of New York-based Morgan Stanley, which oversees almost $8 trillion in assets.
Many of those investors may value the convenience of managing stocks, bonds, and crypto on one platform, especially one that has managed their money for years.
This is especially true among older investors who might be curious about Bitcoin, but are wary of opening new accounts at a crypto exchange they don’t know.
‘Limited impact’
Bernstein said Schwab and E*Trade will probably have “limited impact” on the marketplace.
The analysts highlighted how Fidelity’s digital assets unit, which jumped into crypto years ago, only offers trading for Bitcoin, Ethereum, and Litecoin.
Coinbase, by comparison, supports more than 250 cryptocurrencies and Robinhood offers trading for more than two dozen tokens.
However the market shakes out, one thing is certain — it’s getting crowded.
Pedro Solimano is a markets correspondent based in Buenos Aires. Got a tip? Email him at psolimano@dlnews.com.
