Morgan Stanley has lowered its cryptocurrency trading commission on the E*Trade platform to 0.5%, directly undercutting Charles Schwab's previous 0.75% rate. Bloomberg analyst Eric Balchunas called the move a 'serious competitive threat' to dedicated crypto exchanges, noting that commissions could fall even lower, potentially making crypto trading nearly free.
The new pricing echoes a pattern from early 2024, when spot ETFs launched in the US and Morgan Stanley already charged just 0.14% to outpace rivals. Now with 0.5%, the bank again leaves Schwab behind, signalling a fresh round of fee compression across the sector.
Exchange Profits Squeezed, Coinbase Cut 14% of Staff
Lower commissions benefit investors but pressure platforms reliant on trading income. Coinbase recently reported financial strain and laid off 14% of its workforce. Jed Finn, head of Morgan Stanley's wealth management, explained the rationale: 'This is not just about cheaper trades. The main goal is to keep our 8.6 million clients from leaving for competitors.'
Market analyst Keneabasi Umoren said Wall Street's entry will pressure US spot trading and custody fee revenue, pushing exchanges to explore global markets and derivative products more aggressively.
Industry Split: Some See a US-Localized War
Gate COO Kevin Lee views the fee war as more of a US phenomenon. Global exchanges have already matured and diversified revenue via staking and structured products. 'We saw equity commissions fall over time due to intense competition,' Lee said. 'Smart platforms now earn from multiple services, not just trading fees.'
Georgii Verbitskii, founder of TYMIO, welcomed the move as a milestone for mainstream adoption, arguing that traditional banks entering crypto signals broader acceptance of digital assets.
The bank hasn't disclosed whether the 0.5% will extend to other client segments or more assets. One thing is clear: Wall Street's fee war has arrived in crypto, and exchanges must brace for thinner margins.