Cryptocurrency paths diverge for Robinhood and E*Trade services

In the ever-evolving world of finance, two significant developments have emerged. Major financial institutions such as Charles Schwab, SoFi, and Morgan Stanley are exploring entry into the cryptocurrency space, while E*Trade is leading the charge with a serious move to provide retail users with direct access to digital assets.

E*Trade's decision to ramp up its crypto services marks a significant milestone in the industry. The company, which already offers its wealthier clients access to crypto exchange-traded funds, options, and futures contracts, is set to roll out its platform for retail users next year. This move is considered the most significant step by a major U.S. bank in providing direct access to cryptocurrencies for the masses.

On the other hand, Robinhood, known for its retail client base, has decided to scale back its digital assets. Cryptocurrency transaction-based revenue makes up more than 43% of Robinhood's total transaction revenue, but the company's reliance on retail trading has led to highly volatile revenues. In Q1 2025, Robinhood's crypto trading volume fell by 35%, and its crypto-related revenue for the same quarter was $252 million, a 30% decrease from the previous quarter.

Joel Hugentobler, a Cryptocurrency Analyst at Javelin Strategy & Research, suggests that Robinhood may have maxed out their product in crypto for now. CEO Vlad Tenev has confirmed the company's aim to diversify the business outside of the crypto sector, with a focus on stabilizing revenues with more consistent streams.

Meanwhile, Morgan Stanley, which boasts a higher net worth client base compared to Robinhood, is also exploring ways to add crypto trading to the E*Trade platform. With high-net-worth individuals showing a growing interest in regulated, secure access to cryptocurrencies, the anticipation of the growth of tokenization in the coming months is palpable.

These distinct approaches between Robinhood and E*Trade can be attributed to their different client bases. As the cryptocurrency landscape continues to evolve, it will be interesting to see how these developments unfold and shape the future of finance.