Wall Street enters crypto trading, sparking a price war, industry segmentation accelerates but the "replacement theory" is questioned

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BlockBeats News. May 12 — As Morgan Stanley announced it would roll out crypto trading on its E*TRADE and cut trading fees to 50 basis points, lower than competitors such as Coinbase, Robinhood, and Charles Schwab, market discussion about traditional finance (TradFi) “taking over” the crypto industry has intensified.

Some Wall Street analysts believe this move could further squeeze profit margins for U.S. crypto trading platforms and even disrupt existing business models. However, some industry insiders argue that this judgment is overly simplistic.

Gate Chief Business Officer Kevin Lee said that global crypto trading platforms have long shifted away from a single spot trading-fee model. Their revenue structures have expanded in diversified directions, including staking, derivatives, institutional services, and ecosystem development. The entry of traditional finance reflects more increased competition, rather than a “substitution” relationship.

Meanwhile, some market analysts believe that the entry of institutions such as Morgan Stanley will drive crypto assets further into the mainstream financial system. But it may also force domestic U.S. exchanges to shift even more toward derivatives and global market expansion in order to respond to the trend of compressed spot trading profits.

Overall, the industry consensus is gradually diverging: the entry of traditional finance is viewed as a long-term positive for adoption, but the view that it will “completely replace crypto-native exchanges” remains highly controversial.

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