E*TRADE Opens Crypto Trading to Millions, but Zerohash Holds the Keys

E*TRADE switched on direct Bitcoin, Ethereum and Solana trading for its full client base this week, Morgan Stanley said, completing a rollout that began as a small pilot in May. Eligible clients now buy, sell and hold the three coins through a linked Zerohash account. The flat 50 basis point fee shows up right alongside their stocks and funds on the same screen.

That is the headline everyone is running: Wall Street’s biggest self-directed brokerage opening crypto to millions of retail accounts. One layer down, every trade, and the custody behind it, runs through a single infrastructure firm called Zerohash. Morgan Stanley itself holds a stake in that company, which Mastercard is reportedly trying to buy for close to $2 billion.

E*TRADE Turns On Direct Crypto Trading for Millions

The launch expands Morgan Stanley’s footprint in digital assets, folding crypto into one of the largest retail brokerage platforms in the United States. The bank first announced the Zerohash partnership in September 2025, ran a limited pilot starting in May 2026, and reached full availability by mid-July.

The self-directed E*TRADE channel alone serves 8.6 million households and held about $1.56 trillion in client assets as of March 31, per Morgan Stanley’s latest financial supplement. That is separate from the roughly 16,000 financial advisors who oversee the bulk of the firm’s $9.3 trillion in client assets firm-wide.

Trading runs 24 hours a day, seven days a week, matching the always-on nature of crypto markets. On the fee side, 50 basis points works out to $5 for every $1,000 traded. The crypto rollout arrived alongside a wider platform overhaul: fractional share trading across all E*TRADE platforms, a redesigned IPO Center with added educational material, a new Guided Retirement Planning tool built on Morgan Stanley’s Goals Planning System, and upgrades to the Power E*TRADE Pro desktop platform for active traders.

Morgan Stanley posted record second-quarter results this week too. Earnings per share came in at $3.46 against a forecast of $2.93, on revenue of $21.3 billion versus an expected $19.62 billion.

Chad Turner, Head of Morgan Stanley Wealth Management Platforms, said the rollout is “advancing our digital assets strategy and bringing new capabilities to clients in an integrated way.” Matt Jones, who leads E*TRADE from Morgan Stanley, put it in terms of what clients expect now: they want to “invest, trade, bank, and plan for the future all in one place.”

Undercutting Schwab, Fidelity and Coinbase on Price

E*TRADE’s 50 basis point fee undercuts most of the field. The rate sits below Schwab’s 75 basis points, Fidelity’s roughly 1%, and Coinbase retail fees that can exceed 0.5% depending on tier and payment method. Robinhood charges no commission but builds spreads of 35 to 95 basis points into its execution price.

Interactive Brokers already routes its own crypto trading through the same category of custodian, at a lower price still. Trading with Paxos or Zerohash on that brokerage costs 0.12% to 0.18% of trade value, with a $1.75 minimum per order. E*TRADE’s own comparison chart for a $1,000 crypto trade shows just a 0.50% commission, with no added spreads and no markups.

The pricing fight was already visible when the pilot version launched in May.

By the time the dust settles it’ll be pretty dirt cheap to trade crypto everywhere.

Eric Balchunas, Bloomberg’s senior ETF analyst, made that prediction the week Morgan Stanley’s pilot undercut every major retail rival on price, comparing it to the race to zero that hit spot Bitcoin ETF fees a year earlier.

Zerohash Holds the Keys

Behind E*TRADE’s interface sits a company most clients have never heard of. The integration is powered by infrastructure provider Zerohash, which handles the liquidity, custody and settlement plumbing behind the scenes. That work runs through a Chicago firm in which Morgan Stanley itself holds a stake.

Institutional crypto bulls tend to underweight one risk: concentration. When millions of users hold crypto through a single custodial relationship powered by one infrastructure provider, any technical or regulatory disruption at that choke point reverberates widely. Zerohash’s reliability is now a systemically important variable for a meaningful chunk of retail crypto exposure. The same two custodians, Paxos and Zerohash, now sit underneath crypto products at more than one major brokerage, so a technical failure would not stay contained to a single brand.

BeInCrypto reported that Mastercard recently moved to acquire the firm in a deal valued near $2 billion, a figure neither company has confirmed publicly. Zerohash, notably, has also applied for its own OCC trust charter.

• What we know: Zerohash executes, custodies and settles every E*TRADE crypto trade through an account held separately from Morgan Stanley’s broker-dealer.
• What we know: Morgan Stanley holds an equity stake in Zerohash, and Zerohash has separately applied for its own national trust bank charter.

• Unconfirmed: BeInCrypto’s report that Mastercard is buying Zerohash for close to $2 billion has not been verified by either company.
• Unconfirmed: Whether Morgan Stanley’s crypto custody fully moves in-house once its own trust bank clears final regulatory approval.

The plumbing underneath E*TRADE’s crypto button sits with one company, not many.

One Charter, Still Pending

The transfer feature E*TRADE has promised for later this year depends on a bank that does not fully exist yet. Morgan Stanley said it expects to transition its digital asset services to Morgan Stanley Digital Trust, its national trust bank currently in organization.

Law firm Davis Polk advised the bank in obtaining preliminary conditional approval for the new charter, and the entity has now begun its organizational phase. Conditions attached to that approval require the trust to hold at least $50 million in tier 1 capital for its first three years, at least half of that in eligible liquid assets, plus a reserve equal to 180 days of operating expenses.

Getting there was not friction-free. A banking trade group’s comment to the Office of the Comptroller of the Currency (OCC, the federal regulator that charters national trust banks) questioned whether the trust’s activities were even permissible for a national trust bank, asked how regulators would unwind the trust if it failed, and flagged safety and soundness concerns over its concentration in digital asset services. The OCC said none of that was grounds for denying the application.

Jasper Sneff Nanni, a managing principal at consulting firm FS Vector, said the approval “will create a sense of urgency for wealth management competitors who want to stay on equal footing.”

• December 2025: the OCC granted conditional approval to five applicants, including Circle’s First National Digital Currency Bank, Ripple National Trust Bank, BitGo, Fidelity Digital Assets and Paxos Trust Company.
• February 2026: three further conditional approvals followed, for Stripe’s Bridge National Trust Bank, Crypto.com and Protego.
• June 18, 2026: Morgan Stanley Digital Trust received its own preliminary conditional approval, four months after filing.

Circle, Ripple and even World Liberty Financial, tied to the family of President Donald Trump, have pursued the same type of charter, a sign of how crowded this regulatory lane has become. Morgan Stanley already holds two full national bank charters, on top of the one now in the works.

Bitcoin, Ether and Solana ETFs Move in Parallel

Morgan Stanley’s spot Bitcoin ETF launched in April with a 0.14% management fee, the lowest-cost Bitcoin ETF on the US market at the time, and debuted on NYSE Arca as the first spot Bitcoin ETF from a major US commercial bank. That pricing edge was aimed squarely at the market’s largest Bitcoin ETF by assets. In its first six trading days, the fund pulled in more than $100 million in net inflows, more than WisdomTree’s spot Bitcoin ETF had drawn cumulatively since its January 2024 debut.

The fund now holds net assets of $384 million, according to SoSoValue data. In June, Morgan Stanley amended its proposed spot Ether and Solana ETF filings to set management fees at 0.14% as well, after first applying to list the funds back in January.

Morgan Stanley’s own product disclosures for the fund warn that an investment carries a high degree of risk and heightened volatility, and that owning shares is not the same as owning bitcoin directly. The same undercutting instinct that shaped E*TRADE’s crypto fee shows up again in the ETF filings.

Is Crypto Held at E*TRADE Insured?

No. Crypto bought through E*TRADE’s Zerohash-powered account is not covered by federal deposit insurance or brokerage account protection. It sits in a separate, non-brokerage account, so clients absorb the full downside if prices collapse or the custodian runs into trouble, the same disclosure every bank-backed crypto product carries.

Custody and transaction services run through separate Zerohash accounts that are not covered by the Federal Deposit Insurance Corporation (FDIC) or the Securities Investor Protection Corporation (SIPC). A 1099-DA tax form is furnished by Zerohash and made available in E*TRADE’s own tax center for crypto account holders.

E*TRADE says its crypto services will transition to Morgan Stanley Digital Trust once the transfer functionality promised for later this year goes live.

Disclaimer: This article is for informational purposes only and does not constitute financial or investment advice. Cryptocurrency trading carries a high degree of risk, including possible loss of principal, and digital assets held through brokerage-linked accounts are not covered by FDIC or SIPC protection. Consult a licensed financial advisor before making investment decisions. Figures are accurate as of publication on July 17, 2026.