Charles Schwab launches crypto trading

What happened: Charles Schwab, a leading U.S. brokerage managing $12 trillion in assets, launched spot cryptocurrency trading for retail investors on May 12, offering Bitcoin and Ethereum. Concurrently, Morgan Stanley rolled out a crypto trading pilot on E*Trade at 0.5% fees, aiming to undercut competitors. Charles Schwab's move comes amidst $233.25 million in net outflows from Bitcoin spot ETFs on the same day.

Market impact: The entrance of established financial giants like Charles Schwab and Morgan Stanley into the crypto trading space intensifies competition, potentially driving down fees and increasing accessibility for retail investors. This could shift market share among brokers and boost crypto adoption. Meanwhile, outflows from Bitcoin ETFs may indicate a cooling in institutional interest.

What to watch next: On May 19, Charles Schwab reports Q1 earnings, which could provide insights into the uptake of its new crypto trading service. Additionally, monitor regulatory developments, such as the SEC's stance on crypto ETFs, and upcoming crypto-related economic data releases, like Grayscale's Bitcoin holdings, to gauge institutional sentiment.