Charles Schwab to launch direct bitcoin, ethereum trading to compete with Robinhood

Charles Schwab is rolling out crypto trading, allowing clients to buy bitcoin and ether through a new arm called Schwab Crypto, the company said Thursday. 

The move places the brokerage in direct competition with companies like Robinhood, which serves a comparatively younger clientele and also offers stock and crypto investing (as well as an array of other financial services now).

Schwab, one of the largest brokerages in the world with more than $11 trillion in client assets, has been vocal for months about its clients' interest in crypto investing. The capability will be available in the coming weeks.

"What we hear from many of our clients is that they have 98% of their wealth here at Schwab and they might hold a percent or 2% at some digital native firm to hold their crypto, and they really want to bring it back to Schwab because they trust us [and] they want it to sit alongside their other assets," CEO Rick Wurster told CNBC's "Money Movers" last July.

The move further blurs the line between the traditional financial industry and the growing world of crypto assets and digital finance. Schwab is the latest example of increasing crypto acceptance by major banks, asset managers, and brokers – who may have spent years waiting on the sidelines to launch crypto offerings and feel better able to do so given the Trump administration's friendly regulatory stance toward the new industry. In recent days, Morgan Stanley launched a spot bitcoin ETF, the Morgan Stanley Bitcoin Trust (MSBT), and Goldman Sachs filed to launch a bitcoin income ETF.

Fidelity Investments, Schwab's biggest rival and one of the earliest of the legacy financial firms to the crypto game (beginning as early as 2013) launched a commission-free crypto trading app in 2023. Fidelity also became the first retirement plan provider to let investors put bitcoin in their 401(k)s in 2022, and Fidelity Charitable has been accepting donations in crypto since 2015.

Meanwhile, crypto-native exchanges Coinbase and Kraken are expanding into stocks. Coinbase began rolling out commission-free stock trading in January, and Kraken followed suit just this week.

Schwab will take a 0.75% fee on every crypto trade. By comparison, Robinhood still offers commission-free trading, and fees at Coinbase vary based on tier but can be as high as 4% for retail customers. Schwab is partnering with Paxos on custody, which will allow crypto funds to sit in a separate Schwab account separate from the brokerage.

Schwab shares were lower by 5% on Thursday, weighed down by its first-quarter revenue miss reported earlier in the morning.