Morgan Stanley Launches E*Trade Spot Crypto at 50 bps

Morgan Stanley has launched spot crypto trading on E*Trade, starting May 6, using Zerohash to offer BTC, ETH, and SOL at 50 bps per trade. The pilot is rolling out first to a limited group, with plans to expand access to all 8.6 million E*Trade clients later in 2026. Morgan Stanley frames this as more than cheaper crypto: it is meant to keep retail users inside its wealth-management ecosystem, potentially with a proprietary digital wallet that could hold crypto alongside tokenized stocks, bonds, and real estate. Fee benchmarks underscore the competitive pressure. Schwab is cited at 75 bps, Coinbase retail rates can exceed 0.5% depending on tier/payment method, and other brokers typically charge higher retail spreads (e.g., Fidelity around 1%). Bloomberg ETF analyst Eric Balchunas warned exchanges should be concerned, linking the move to the spot Bitcoin ETF fee race that initially priced near ~50 bps and was later undercut. For traders, the near-term takeaway is intensifying retail on-ramp price competition, which may improve entry costs for BTC and ETH (and SOL) flows. It could also pressure crypto venues that rely heavily on trading fees, even if overall spot demand remains healthy.