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E*Trade Will Launch Bitcoin and Ether Trading: Everything You Need to Know About E*Trade and Crypto
News broke this past week that retail brokerage giant E*Trade is preparing to launch bitcoin and Ether trading. The news was first reported by Bloomberg on Saturday.
If the report is true, then E*Trade will unleash crypto trading to its 5 million retail clients. Overnight, E*Trade customers will be able to buy and sell BTC and ETH as easy as they hold other digital assets in their trading accounts.
Last week, it was reported that TD Ameritrade is preparing to offer similar services through a partnership with crypto trading platform ErisX. Trading platforms like Robinhood allow users to buy crypto directly from their accounts today.
Keep reading to discover everything you need to know about E*Trade and their decision to list BTC and ETH in the near future.
What is E*Trade?
E*Trade, or E*Trade Financial Corporation, is an electronic trading platform where users can trade various types of financial assets. Today, E*Trade features stocks, futures contracts, ETFs, options, mutual funds, and fixed income investments, among other financial assets.
E*Trade was founded in Palo Alto, California in 1982. Today, the company is based in New York City.
How Big is E*Trade?
At the end of 2018, E*Trade revealed that it had 4.9 million brokerage accounts and a total margin receivables balance of $9.560 billion.
The company processes around 282,000 daily revenue trades every year. In total, E*Trade earned $2.873 billion in revenue in 2018, netting an income of $1.052 billion.
E*Trade offers similar fees to most financial brokers. Buying stocks, options, and exchange traded funds online costs $6.95. Traders who make more than 30 traders per quarter will pay just $4.95 per trade. Broker-assisted trades, meanwhile, cost $25.
Opening an account on E*Trade requires a minimum deposit of $500. However, there are no minimum trade requirements, and there’s a $0 deposit requirement for IRA accounts.
E*Trade also has a Pro trading platform for traders with an account balance of at least $250,000, as well as an advanced platform called OptionsHouse that has no minimum deposit requirements.
It’s unclear what type of fees E*Trade would charge for BTC and ETH traders.
Who is E*Trade For?
E*Trade is somewhere between Robinhood and TD Ameritrade in terms of its customer base. Robinhood targets younger investors and millennial's, while TD Ameritrade targets a more traditional class of investors. E*Trade is somewhere in between, catering to ordinary investors who want to manage their own investment accounts.
E*Trade routinely ranks among the best brokerage platforms in America. Customers appreciate the platform for being convenient and easy to use. It’s frequently listed alongside TD Ameritrade, Ally Invest, Fidelity, Charles Schwab, and other major investment platforms catering to investors across America.
When Will E*Trade Launch Bitcoin and Ether Trading?
The first rumor of E*Trade launching BTC and ETH trading came from a Bloomberg report on April 26.
“E*Trade Financial Corp. is getting ready to let customers trade cryptocurrencies on its platform, according to a person familiar with the matter,” wrote Bloomerg.
“E*Trade would be one of the largest securities brokerages to allow crypto trading.”
Bloomberg’s report is only three paragraphs long. There’s limited additional information beyond what we’ve posted above. A spokesperson for E*Trade declined to comment.
Bloomberg’s report makes it seem like crypto trading is pretty close, however. It seems possible E*Trade could launch BTC and ETH trading by the end of summer 2019, although we may have to wait until the end of the year 2019.
Why is This a Big Deal for Crypto?
If eTrade offers crypto trading, it would become one of the largest security brokerages to allow crypto trading. It would instantly compete with services like Coinbase, which have built their business on making crypto easier to access, and Robinhood, a fintech startup valued at $5.6 billion.
This would also be a big deal in terms of legitimizing cryptocurrency trading for investors. As firms like eTrade and TD Ameritrade offer crypto trading, the industry will be seen as less of a risky novelty and more of a legitimate asset class. Investors might be particularly attracted to crypto for its ‘alpha’, allowing crypto to move independently of any particular stock market or national economic news.
Here’s how Bloomberg described the industry impact of E*Trade approving bitcoin and Ether:
“The arrival of E*Trade could help to legitimize cryptocurrency trading for wary investors. On Thursday, New York’s attorney general accused the operator of one prominent crypto exchange of hiding the loss of about $850 million, sending Bitcoin’s price tumbling. Bitcoin has failed to rise back to levels it hit at the end of 2017, when it surged to nearly $20,000, but it’s still worth about 35 percent more than it was at the start of 2019.”
Ultimately, we’re beginning to see signs that the floodgates may be opening. E*Trade, TD Ameritrade, and others have all jumped on board crypto. More mainstream financial institutions could certainly follow suit.
The fact that E*Trade could allow BTC and ETH trading by the end of 2019, however, is huge news for crypto as it solidifies its position as a legitimate asset class.