Wall Street Enters Crypto Trading, Sparking Price Wars and Accelerating Industry Divergence Amidst Replacement Theories Being Questioned

On May 12, as Morgan Stanley announced it would launch crypto trading on its E*TRADE platform and reduce fees to 50 basis points, lower than competitors like Coinbase, Robinhood, and Charles Schwab, discussions about traditional finance (TradFi) ‘taking over’ the crypto industry intensified. Some Wall Street analysts believe this move could further compress profit margins for U.S. crypto trading platforms and even disrupt existing business models. However, industry insiders argue that this assessment is overly simplistic. Kevin Lee, Chief Business Officer of Gate, stated that global crypto trading platforms have long transitioned from a single spot fee model to a diversified revenue structure that includes staking, derivatives, institutional services, and ecosystem development. The entry of traditional finance reflects increased competition rather than a ‘replacement relationship.’ Meanwhile, some market analysts believe that the entry of institutions like Morgan Stanley will further integrate crypto assets into the mainstream financial system but may force U.S. exchanges to pivot more towards derivatives and global market strategies to cope with the trend of compressed spot trading profits. Overall, the industry’s consensus is gradually diverging: the entry of traditional finance is seen as a long-term positive for adoption rates, but the idea of ‘completely replacing crypto-native exchanges’ remains highly controversial.