$3 Trillion Asset Manager Charles Schwab Looks to Buy TD Ameritrade, Is It Good For Bitcoin?

Discount broker TD Ameritrade currently offers Bitcoin Futures trading through CME Group and is an investor in crypto exchange ErisX. Will Charles Schwab change it's stance on cryptocurrencies or will it try and shut down the crypto-friendly service?

The announcement that Charles Schwab is in discussions to buy TD Ameritrade has been made on Thursday.

The deal would create a $5 trillion in combined assets behemoth, with $3.8 trillion coming from Schwab and $1.3 trillion coming from TD Ameritrade. This is what senior analyst for Wells Fargo Mike Mayo had to say on the matter:

“This would create a Goliath in Wealth Management”

TD Ameritrade’s shares went up in premarket trading more than 24%, while Schwab’s also surged by 8%. On Thursday, Financial Times reported that Schwab is going to pay $25 billion to get TD Ameritrade.

The Deal Would Help the Industry Consolidate

Coming at a time when the industry is being massively disrupted, the deal between Schwab and TD Ameritrade would balance things. Recently, all-important brokerages have made announcements that they’re planning to go on zero commissions, with Schwab being the first to eliminate commissions in October. TD Ameritrade and Fidelity soon followed. It’s being rumored that Schwab’s CEO Walter Bettinger is going to run the joint company. Tim Hockey, the President, and CEO at TD Ameritrade has announced in July that he’s going to leave the brokerage, but not sooner than February 2020.

Schwab’s Founder Thinks the Retail Brokerage Industry Needs Consolidation

Charles Schwab, who’s the Chairman and founder at Schwab has said last month that it’s logical for the retail brokerage to become consolidated. About buying another brokerage he said,

“Certainty at the right valuation, we would do it, but we are really strong and very independent the way we do things, and so if its happens that it’s appropriate for our shareholders we will do it.”

Trades at no charge has been a blast for consumers, but it caused brokerages to find it difficult to make a profit. The most important brokerage companies were pressured to go for the zero commissions strategy back in 2013 when the Silicon Valley-based startup Robinhood has introduced the notion. Vanguard Group and J.P. Morgan Chase followed, ETrade Financial as well.

This is what JMP Securities’ financial analyst Devin Ryan had to say about consolidation:

“Consolidation thus far has been good and I think that will probably continue to be the case here. The key thing is what does the consumer get out of this. Ultimately the consumer’s been treated very well with lower commission pricing, their getting paid more on a lot of different parts of the platform.”

Schwab’s Stock Was Under Pressure After Dropping Commissions

Soon after introducing zero commission, Schwab’s stock was pressured because investors were worried the lost commission revenue that fed a quarterly revenue of up to $100 million would pressure margins. The stock recovered and brought very strong earnings in October 2019, earnings that had client assets reaching record numbers in the third quarter. More than this, only last week, Schwab proved free trading is truly efficient in bringing in new clients, by saying it has added about 142,000 new accounts in October, which is 31% more than September’s numbers and indicates a 7% jump when compared to last year’s October. These new accounts brought Schwab’s assets at $3.85 trillion.

Schwab and TD Ameritrade, the Biggest Discount Brokers

The two companies are the biggest discount brokers that trade publicly. The market cap of Schwab is $57.5 billion, while TD Ameritrade’s is $22.4 billion. The hopes of consolidation in the industry have caused Interactive Brokers to rise by 2%, whereas shares of ETrade Financial dropped by 4.5% because many expected the broker to be acquired.

Get Free Email Updates!

*Action* Enter Best Email to Get Trending Crypto News & Bitcoin Market Updates

I will never give away, trade or sell your email address. You can unsubscribe at any time.

Oana Ularu
Oana Ularu
Curious about what’s going on with all the money in the world, Oana is bringing you the latest news in the crypto world. She’s aware of the fact that you need to know everything that’s happening on the financial scene in order to play the cryptocurrency market, so you can count on her to share with you every little detail on what matters.

[Alert] Use the author's self-conducted information at your own risk, do you own research, never invest more than you are willing to lose.

[Disclosure] The published news and content on BitcoinExchangeGuide should never be used or taken as financial investment advice. Understand trading cryptocurrencies is a very high-risk activity which can result in significant losses. Editorial Policy \\ Investment Disclaimer


Please enter your comment!
Please enter your name here


Live Bitcoin Price & Latest BTC Charts

Today's Latest Crypto News

High Chances of a Bitcoin ETF Approval in 2021 as BTC Trades Like Gold

After a strong rally right at the beginning of this week, Bitcoin is now keeping around $13,000 in the second half. While BTC has taken...

Justin Sun's P2P Streaming Service Acquires eSports Platform DLive; Now Launches BitTorrent X Ecosystem

BitTorrent Inc, the popular peer-to-peer data sharing protocol and app, has acquired the well-known decentralized streaming platform DLive. The firm also announced that it...

DeFi Growth & Stablecoin Surge Most Bullish Crypto Development: DCG State of Crypto 2020 Survey

39% of the respondents that involve 150 portfolio companies see DeFi as the most bullish crypto development of 2020, as per the DCG Founders...

Non-Custodial Bitcoin Exchange, Hodl Hodl, Launches Lending Service Without KYC

Hodl Hodl, a non-custodial Bitcoin exchange, is launching a KYC-free lending product for its customers. The exchange claims that its lending product would be...

Total Value Locked in Harvest Finance Surpasses $1 Billion, Up 366,200% Since September

Decentralized platform Harvest Finance that provides users a way to farm assets for the highest yields now has more than a billion dollars in...

BitcoinExchangeGuide is a hyper-active daily crypto news portal with care in cultivating the cryptocurrency culture with community contributors who help rewrite the bold future of blockchain finance. Subscribe on Google News, see the mission, authors, editorial links policy, investment disclaimer, privacy policy. Got News? Contact us, we are human too. Note: nothing here is financial advice, do your own research thoroughly.

Start Using Crypto Today