• Morgan Stanley reportedly introduced a crypto trading pilot on E*Trade, charging 50 basis points per transaction.
• The pilot is currently limited to a select group of users, with broader access planned for E*Trade's 8.6 million clients later this year.
• The rollout expands Morgan Stanley's push for crypto exposure, following the recent launch of its spot Bitcoin ETF, MSBT.

Morgan Stanley has reportedly introduced a crypto trading pilot on E*Trade, charging clients 50 basis points (0.5%) per transaction, according to a Bloomberg report on Wednesday.

The pilot is currently available to a limited group of users, with broader access expected later in the year for its 8.6 million E*Trade clients. Initial offerings are set to include major digital assets such as Bitcoin (BTC), Ethereum (ETH) and Solana (SOL).

Morgan Stanley undercuts rivals on crypto trading costs

The pricing places Morgan Stanley below typical retail trading fees charged by platforms like Coinbase, Robinhood and Charles Schwab, signaling a more aggressive push into the retail crypto market. The move builds on the bank's broader expansion into digital assets, including the recent launch of its spot Bitcoin exchange-traded fund (ETF), MSBT.

Bloomberg ETF analyst Eric Balchunas noted that the move could intensify fee competition across the industry. He stated that Morgan Stanley's 50 basis point pricing undercuts Schwab's 75 basis points, which itself had already pressured fees lower across the market. More traditional financial firms are unlikely to cede ground, suggesting rivals could respond with further fee reductions.

"This is why TradFi is no joke and crypto exchanges should be scared," Balchunas wrote in a Wednesday X post.

He compared the trend to the pre-launch phase of Bitcoin ETFs, where issuers aggressively cut expense ratios to attract inflows, ultimately driving costs down across the board.

"By the time the dust settles it'll be pretty dirt cheap to trade crypto everywhere — just as we saw with BTC ETF exp ratios prior to launch," Balchunas added.

He also suggested that continued competition among traditional financial firms could push trading fees even lower, potentially to zero. However, such models may rely on alternative revenue streams such as payment for order flow. 

Balchunas emphasized that ETFs are likely to remain the dominant vehicle for attracting capital in the near term.

The development reflects a broader push by traditional financial institutions into digital assets. Charles Schwab has already launched spot Bitcoin and Ethereum trading for retail clients at higher fee levels, while firms such as Goldman Sachs, JPMorgan, BNY Mellon and Citigroup continue expanding their crypto offerings across custody and trading.