Banking giant Morgan Stanley (MS) is looking into entering the crypto trading space through its E-Trade platform as it bets on a more crypto-friendly regulatory landscape under President-elect Donald Trump, The Information reports. If this happens, E-Trade could become one of the biggest traditional brokerage firms to offer crypto trading and compete against platforms like Coinbase (COIN). However, it will need a green light from regulators, including the Federal Reserve, since Morgan Stanley is subject to federal oversight.
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Charles Schwab (SCHW) is also exploring its own move into crypto. Both E-Trade and Schwab are expected to start small by likely focusing on Bitcoin and Ethereum. With their existing crypto-related ETF offerings, these firms could shift some trading volume from dedicated crypto platforms. Still, Coinbase has an edge with its broad selection of over 200 tokens and a loyal base of experienced crypto users.
A Key Obstacle for Traditional Brokerages
In addition, a key obstacle for traditional brokerages has been the SEC’s 2022 rule requiring crypto assets held for customers to be listed as liabilities, which makes custody services less appealing. Nevertheless, with Trump’s incoming administration expected to install more crypto-friendly regulators at the SEC, there is hope that the rule could be repealed and open the door for brokerages like E-Trade and Schwab to go all in. If that happens, the crypto market could see a wave of fresh competition and investment from Wall Street heavyweights.
Is MS Stock a Good Buy?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on MS stock based on five Buys, 10 Holds, and zero Sells assigned in the past three months, as indicated by the graphic below. After a 42% rally in its share price over the past year, the average MS price target of $129.08 per share implies 2.4% upside potential.
