Wall Street collectively turns: Morgan Stanley launches digital currency wallet mid-year, institutional competition accelerates in the crypto race

The attitude of the financial industry is undergoing a transformation. Wall Street, which once took a cautious wait-and-see approach to crypto assets, is now entering this space at an unprecedented speed. Morgan Stanley’s latest announced plan is the most symbolic signal of this shift — the bank will launch its own digital currency wallet in the second half of 2026, while expanding its coverage of crypto asset investments.

These actions are not isolated events. Morgan Stanley is making efforts on multiple fronts: in the first half of this year, the bank will open spot trading for Bitcoin, Ethereum, and Solana on the E-Trade electronic trading platform; more recently, it filed an S-1 registration statement with the U.S. Securities and Exchange Commission (SEC) to apply for the issuance of spot ETFs for Bitcoin, Ethereum, and Solana.

Wealth Management Upgrade, Traditional Giants Embrace Crypto Trading

Jedd Finn, head of Morgan Stanley Wealth Management, said in an interview with Barron’s Weekly that as infrastructure continues to improve, the boundaries between traditional finance (TradFi) and decentralized finance (DeFi) will gradually blur. He pointed out, “Over time, with the development of infrastructure, we will be able to better integrate traditional financial and decentralized financial ecosystems.”

Behind this statement is a deep understanding of the current market situation. Since the U.S. officially approved the listing of Bitcoin spot ETFs in January 2024, market attitudes toward digital currencies have undergone a profound change. The Bitcoin spot ETF has accumulated over $1.6 trillion in trading volume since its launch; there are currently 11 Bitcoin ETFs in the U.S., with total assets under management of about $130 billion, among which BlackRock’s IBIT has become the fastest-growing ETF in history.

Morgan Stanley’s institutional clients’ demand for digital currencies is also rapidly increasing. In the second half of 2024, the bank first opened wealth management advisors to recommend Bitcoin spot ETFs to some high-net-worth clients; by 2025, the bank further lifted restrictions, opening related investments to all client accounts, including retirement accounts.

Spot Trading and Digital Wallets, Building a Complete Service Ecosystem

The reason Morgan Stanley continues to launch new digital currency products and services is to build a comprehensive crypto asset investment ecosystem. From spot trading to ETF investments, and to self-custodied digital wallets, the bank is enabling institutional clients and high-net-worth investors to meet all their crypto asset needs on a familiar platform.

It is worth noting that Morgan Stanley’s proactive steps are sparking competitive awareness among Wall Street peers. Rumors suggest that JPMorgan Chase is also evaluating whether to offer crypto spot and derivatives trading services to institutional clients. Industry insiders know well that in this digital revolution, latecomers may be marginalized.

Wall Street’s Anxiety: Why Are Institutions Going All-In on Digital Assets?

Behind this collective acceleration lies a deep-seated anxiety among financial institutions about being left behind by the times. Bitwise’s Chief Investment Officer Matt Hougan succinctly summarized the current situation: “The surface consensus is that institutions are gradually accepting cryptocurrencies; but the accurate view is that institutions are rushing headlong into crypto and treating it as a business priority.”

Morgan Stanley itself described the approval of Bitcoin spot ETFs in early 2024 as a “paradigm shift in global understanding and usage of digital assets.” Looking now, this is not only a change in market sentiment but a fundamental shift in institutional investor behavior.

From Cautious Wait-and-See to Full-Speed Sprint, Industry Consensus Has Changed

The logic behind institutional embrace of digital currencies is actually very simple: clients are changing, markets are changing, and regulatory environments are changing. When Bitcoin spot ETFs are approved, infrastructure improves, and regulatory frameworks become clearer, cryptocurrencies once seen as “risky assets” are evolving into a “necessary allocation” in institutional portfolios.

Morgan Stanley’s digital currency wallet launch in the second half of this year, along with a series of spot trading and ETF applications, fully illustrates this point. Wall Street is demonstrating through concrete actions that crypto assets are no longer fringe topics but a new frontier of mainstream finance. Traditional financial institutions that once questioned cryptocurrencies are now racing into this space.