Morgan Stanley launches a 50 basis point crypto price war on E*Trade, undercutting Coinbase and Schwab.
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The 50 basis point fee is lower than Schwab’s 75bps, Fidelity’s 1%, and Coinbase’s retail fees that can exceed 0.5% depending on tier and payment method. Jed Finn, head of wealth management at Morgan Stanley, said the move is “much more than just trading cryptocurrencies at cheaper rates” and is a strategy to keep the company’s 8.6 million customers within its ecosystem.
Why are virtual currency exchanges paying close attention?
“Crypto exchanges should be scared,” Bloomberg ETF analyst Eric Balchunas warned shortly after launch. He drew a direct comparison to the fee competition after the launch of the Spot Bitcoin ETF. In this competition, providers started at 50 basis points, with Morgan Stanley topping them all with an offer of 14 basis points.
“When this problem subsides, you will be able to trade cryptocurrencies everywhere,” Balciunas said. Opposing industry leaders pointed out that this perspective is US-centric and that global platforms have already diversified beyond spot trading fees into derivatives, DeFi, and international markets.
Coinbase, which posted a quarterly loss of $1.49 per share on revenue of $1.41 billion in the first quarter of 2026, had already launched commission-free stock trading in February as part of its “Everything Exchange” strategy to reduce its reliance on crypto trading fees.
The scale of Morgan Stanley’s distribution advantage
Morgan Stanley’s 16,000 financial advisors oversee $9.3 trillion in client assets, a distribution channel unmatched by any crypto-native platform. The pilot is small for now, but the bank plans to roll out access to all 8.6 million E*Trade customers in the second half of 2026, along with its own digital wallet that can hold cryptocurrencies alongside tokenized stocks, bonds and real estate.
The move follows Morgan Stanley’s April 8 launch of its own Spot Bitcoin ETF (MSBT), which charges just 14 basis points in fees and avoided outflows throughout its first month of trading, a record no other Spot Bitcoin ETF has matched during the same period.
