When Brokerages Set Their Sights on Cryptocurrency Trading

"I've been having conference calls until 2 AM every day recently." The speaker is a veteran finance professional with over a decade in traditional brokerage. Sitting in his Beijing office, he deals with regulation, business cooperation, and project scheduling. Despite his tired eyes, his tone remains calm. Having witnessed the last financial crisis and global market shifts, he has recently pivoted toward virtual assets—a sector once considered "uncertain" by traditional finance.

The Early Moves: Robinhood's Crypto Foray

Traditional finance's interest in Web3 didn't start in 2025. Robinhood, known for zero-commission stock trading, launched Bitcoin and Ethereum trading features in 2018. Initially a minor product addition, it allowed users to buy cryptocurrencies as easily as stocks, without wallets or blockchain knowledge. By late 2024, crypto trading accounted for over 35% of Robinhood's net revenue, with trading volume surging 455%, and revenue up 733% year-on-year to $358 million. In Q1 2025, crypto contributed over 27% of revenue, doubling trading revenue to $252 million.

Robinhood quarterly cryptocurrency asset trends, source: IO.FUND

This growth was driven not by technology but by user demand. Robinhood evolved from a traditional brokerage to a digital asset trading platform.

Traditional Finance's Bold Entry into Crypto

In 2025, major players made decisive moves:

• March: Charles Schwab announced plans to offer spot Bitcoin trading within a year.
• May: Morgan Stanley integrated BTC and ETH trading on E*Trade.
• May: JPMorgan allowed clients to purchase Bitcoin.
• July: Standard Chartered opened spot trading for Bitcoin and Ethereum to institutional clients.
These institutions control trillions in assets and global financial infrastructure, dwarfing the $4 trillion crypto market cap.

Mainstream asset market cap ranking, source: Steemit Community

They are building crypto trading networks grounded in traditional compliance frameworks, leveraging account opening authority, fund flow control, and pricing power. Crypto exchanges (CEXs) that once controlled "asset entry" are now facing competition from these giants. "Crypto trading platforms should start to feel anxious," the finance veteran remarked, not with glee but sober awareness.

Strategies to Stay Relevant

A crypto platform insider described sleepless nights managing cooperation, user feedback, and product development amid fierce competition. The core challenge: shrinking growth opportunities and external pressure from traditional finance encroaching on fiat deposits, custody, account openings, and spot matching. In response, many platforms launched tokenized stock products—allowing users to trade U.S. stocks like Apple or Tesla using crypto stablecoins. Bybit led this trend, launching U.S. stock tokens within two months. Bybit believes centralized exchanges still hold advantages: real users, liquidity, and trading depth. Tokenized stocks meet demand gaps like trading outside market hours or regulatory restrictions. However, participation remains low compared to popular crypto tokens. Yet, this represents crypto's expansion into traditional finance, with DeFi, synthetic assets, and on-chain staking as promising avenues. Tokenized stocks are largely defensive moves, not growth drivers.

Compliance: More Than Just Licenses

Almost all crypto platforms now emphasize compliance—applying for licenses, hiring traditional finance executives, and restructuring. But traditional finance professionals see this as superficial. Obtaining licenses in small jurisdictions doesn't equate to "getting to the table"—gaining access to mainstream banks, clearing networks, and regulatory trust. The traditional system values transparency, risk control, auditing, and funding explainability—areas where crypto platforms often fall short. Some platforms like Bybit have made real progress, obtaining the European MiCA license and establishing a European headquarters in Vienna. Bitget has also secured multiple virtual asset licenses and is pursuing MiCA to stabilize European operations. Still, most platforms lack genuine integration with traditional finance and face high barriers to compliance transformation.

The Industry at a Crossroads

Executives across the globe—from Beijing to Vienna—acknowledge the rapid pace of change and the need to adapt cautiously. Crypto trading platforms are no longer the central players; they are being edged out by larger, more complex systems backed by massive capital. New product launches and announcements continue, but often as attempts to maintain relevance. Yet, optimism remains. Leaders like Xie Jiayin and Emily from Bybit see the entry of traditional finance as an evolution, not just pressure. The merging of crypto and traditional finance could create new opportunities. Still, many questions remain unanswered:
• Will regulators fully accept crypto platforms?
• Will traditional finance collaborate or replace crypto natives?
• Can crypto platforms redefine themselves before the next industry shift?
For now, the industry waits—holding meetings, adjusting products, applying for licenses—preparing for the next wave of reshuffling.

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Source: When brokerages set their sights on cryptocurrency trading originally published on 2025-08-04.

Frequently Asked Questions (FAQ)

Brokerage Entry into Crypto

Q: When did traditional brokerages begin showing interest in cryptocurrency trading? A: While the article highlights significant moves in 2025, traditional finance's interest in Web3, including cryptocurrency trading, began earlier, with platforms like Robinhood launching Bitcoin and Ethereum trading in 2018. Q: What factors drove Robinhood's crypto trading growth? A: Robinhood's significant growth in crypto trading was primarily driven by user demand rather than solely technological advancements, leading the platform to evolve into a digital asset trading platform. Q: Which major financial institutions have entered the crypto trading space? A: In 2025, major players like Charles Schwab, Morgan Stanley (via E*Trade), JPMorgan, and Standard Chartered made substantial entries into the crypto trading market, offering services like spot Bitcoin trading and allowing clients to purchase Bitcoin. Q: How do traditional finance giants compete with existing crypto exchanges? A: Traditional institutions leverage their existing financial infrastructure, including account opening authority, fund flow control, and pricing power, to build crypto trading networks grounded in established compliance frameworks, directly competing with crypto exchanges.

Crypto Platform Strategies

Q: What challenges are crypto platforms facing due to traditional finance's entry? A: Crypto platforms face shrinking growth opportunities and external pressure from traditional finance entities encroaching on services like fiat deposits, custody, account openings, and spot matching. Q: What strategies are crypto platforms employing to remain relevant? A: Many platforms are launching tokenized stock products, enabling users to trade traditional stocks using stablecoins, aiming to meet demand gaps and expand into traditional finance avenues. Q: Are tokenized stocks a significant growth driver for crypto platforms? A: While tokenized stocks represent an expansion into traditional finance, they are largely considered defensive moves and are not yet significant growth drivers, with participation remaining relatively low compared to popular crypto tokens.

Compliance and the Future

Q: What is the perceived superficiality of compliance by traditional finance professionals? A: Traditional finance professionals view obtaining licenses in small jurisdictions as superficial if it doesn't lead to genuine integration with mainstream banking, clearing networks, and regulatory trust. True compliance involves transparency, risk control, auditing, and funding explainability. Q: What is the current state of the crypto industry in relation to traditional finance? A: The industry is at a crossroads, with crypto trading platforms facing increased competition from larger, well-capitalized traditional systems. There is a need for adaptation and a redefinition of their role to remain relevant. Q: What are the key questions facing the crypto industry? A: The industry is grappling with whether regulators will fully accept crypto platforms, whether traditional finance will collaborate or replace crypto natives, and if crypto platforms can successfully redefine themselves before the next industry shift.

Crypto Market AI's Take

The article highlights a significant shift in the financial landscape, where traditional brokerages are increasingly integrating cryptocurrency trading into their offerings. This move by established financial giants like Charles Schwab, Morgan Stanley, and JPMorgan signifies a maturation of the crypto market and a growing acceptance of digital assets. From our perspective at Crypto Market AI, this trend validates our mission to provide sophisticated AI-driven tools for navigating this evolving financial ecosystem. The insights gained from analyzing market movements and regulatory changes are crucial for developing intelligent AI agents for trading that can adapt to both traditional and decentralized finance. As traditional finance institutions build their crypto trading networks, the need for robust, compliant, and AI-enhanced platforms becomes even more apparent.

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