Key Takeaways:
Charles Schwab began rolling out spot Bitcoin and Ether trading May 13 at 75 basis points, inside a brokerage managing $13.1 trillion in client assets.
CEO Rick Wurster said clients wanted crypto "alongside their stocks, bonds and cash, not off to the side on a different app," after customers holding about $25 billion in crypto ETPs asked to consolidate holdings held elsewhere.
Schwab reported record second-quarter revenue of $7.1 billion, up 21 percent, with 11.9 million daily average trades and $120 billion of core net new assets. The rollout covers Bitcoin and Ether only, with custody at Charles Schwab Premier Bank and Paxos providing sub-custody and execution. Clients in New York and Louisiana were excluded at launch.
The launch answers crypto's retail distribution question — who onboards the next hundred million American holders — at a price that undercuts the industry that built the asset class. Morgan Stanley's E*Trade went live July 16 with Bitcoin, Ether and Solana at 50 basis points, one-third cheaper, while Coinbase's implied consumer take rate sits near 1.75 percent.
Fee compression hits native exchanges
Coinbase generated $452 million in consumer transaction revenue on $25.8 billion of consumer volume in Q2, an implied take rate around 1.75 percent. Fidelity charges a 1 percent spread on crypto trades. Schwab set 75 basis points. E*Trade set 50. The compression is already visible in Coinbase's print: a $359.5 million net loss, a third consecutive revenue miss, and consumer transaction revenue down 30 percent year on year.
Every dollar of crypto bought at Schwab for 75 basis points, or at E*Trade for 50, is a dollar that used to be bought somewhere for 175. Zerohash's CEO said every bank with a trading or wealth arm will offer crypto as a spot product. The take rate that funded crypto's native industry was a distribution premium, and the distribution just changed hands.
Transfers and stablecoins come next
Schwab began a crypto transfers pilot in July and took an equity stake in Paxos. The company is targeting mid-2027 for extending spot trading, transfers and custody to its advisor platform. Wurster has discussed working with bank consortia on stablecoins while exploring Schwab's own path.
Fidelity already offers Solana trading and its own Fidelity Digital Dollar stablecoin. Vanguard, the last major holdout, reversed in December to allow third-party crypto ETFs and posted a job for a head of digital assets in July.
The brokerage stack is reassembling the exchange stack piece by piece: trading first, transfers second, yield and dollar tokens after. Each addition pulls another exchange function inside the brokerage perimeter, where it gets priced like brokerage. BlackRock's IBIT holds about $49 billion, and US spot Bitcoin ETFs together hold around $78 billion, with the funds holding over 1.2 million Bitcoin, almost 6 percent of supply.
At Schwab, the ETF and the coin now sit in the same account, behind the same login. The wrapper choice becomes a tax and custody question — ETFs for IRAs, coins for those who want transfers and eventually self-custody — rather than a venue choice. The entity that loses in that arrangement is whichever standalone app no longer holds the login.
This article is for informational purposes only and does not constitute investment advice.
