Wall Street doubles down on crypto as risky perpetual futures lure retail traders
However, adoption is uneven across the industry with capital markets firms furthest along in implementation, while asset and wealth managers are still building out capabilities. Public market funds appear to be an early adoption point, with 80% of respondents expecting tokenized mutual funds and money market funds to matter within five years, compared with just half who see the same near-term significance for equities.
Retail-facing platforms are moving in step. E*TRADE from Morgan Stanley this month completed the rollout of spot crypto trading, letting eligible clients buy, sell and hold bitcoin, ethereum and solana through a linked account with digital asset infrastructure provider Zero Hash, at a 50 basis point fee.
“Our clients’ needs are evolving, and they want to invest, trade, bank, and plan for the future all in one place,” said Matt Jones, Head of E*TRADE from Morgan Stanley. “Whether they’re buying their first share, exploring crypto, participating in an IPO, or planning for retirement, our job is to meet them where they are – with the confidence and trust that comes from being part of Morgan Stanley.”
Perpetual futures risk
Retail traders are also piling into perpetual futures, derivatives that never expire and track an underlying asset’s spot price through periodic payments between long and short positions, the Financial Times reported.
US regulators only cleared the products for domestic trading in May, when the Commodity Futures Trading Commission classified them as futures rather than swaps. Crypto perpetuals traded roughly 90 trillion dollars in volume last year globally, up from about 30 trillion dollars in 2023, according to Bank of America data cited by the FT.
