Charles Schwab’s confirmation that it will add spot Bitcoin and Ether trading to its brokerage platform marks a pivotal moment in retail broker crypto adoption. During its latest earnings call, CEO Rick Wurster stated that “clients tell us that 98% of their wealth sits at Schwab and 1-2% at a digital-native firm. We want that crypto slice back under our umbrella.” We believe the remark clarifies management’s near-term playbook to first seek to repatriate balances that existing clients now keep at crypto exchanges. Second, capture additional demand from clients who have delayed direct crypto exposure until a mainstream brokerage made it available.
For the first part of its strategy, we believe initial flows will hinge on migration mechanics. If Schwab supports automated in-kind transfers from exchanges and adds even modest incentives—like how Robinhood currently pays 1% transfer bonuses for traditional assets—there could be a meaningful share of crypto assets coming to Schwab. The larger upside may sit inside Schwab’s ecosystem in that the platform already holds more than $25 billion in crypto ETPs for clients, demonstrating substantial embedded interest. This highlights how eager Schwab investors are to obtain crypto exposure even through higher-fee wrappers that lack intraday redemption. Once spot Bitcoin and Ether trading is available, some of these ETP holders will likely complement or replace their existing positions with native tokens.
We believe the move into crypto by retail brokerages is strongly defined by demographics. Robinhood has demonstrated that younger investors will adopt crypto quickly when it sits beside equities and options—and crypto has become a large driver of top and bottom-line growth for the fintech brokerage. Traditional brokers have taken notice: Fidelity opened spot trading in 2022, Schwab is now following, and Morgan Stanley’s E*Trade is reportedly close behind. We believe each newcomer will position crypto as an extension of an existing one-stop investing relationship, aiming to keep high-engagement clients from fragmenting their assets across multiple platforms.
In our view, Schwab’s broader digital asset roadmap remains cautious. In the earnings call, management also floated stablecoins and tokenized products “at some point,” yet history reminds us that many institutional experiments typically fade once bull cycles end. Still, we believe that financial institutions are more committed to digital assets this time around. Schwab will also likely have to internally align trading services, retail digital, advisory, and compliance units, no small lift for a firm of its scale. We therefore expect a measured cadence of Bitcoin and Ether trading first, and then perhaps a dollar-backed stablecoin through a partnership, and, only after further regulatory clarity, staking, DeFi, and other onchain products. Concrete products and services launches that would signal deeper commitment include participation in institutional tokenization products such as BlackRock’s BUIDL, crypto-backed lending, or ETH staking integrated into brokerage accounts.
To gauge adoption, we will track several indicators over the next year, including direct-crypto holdings versus the current $25 billion ETP baseline and the growth in crypto-enabled accounts relative to the firm’s 35 million total. We will likely also pay attention to the net migration volume from external exchanges and custodial wallets, the disclosure of crypto-execution or spread revenue in Schwab’s quarterly filings. Should client crypto balances exceed the current ETP figure and daily crypto trades approach even 2% of Schwab’s 7.6 million average daily equity trades, we would view that as proof that a mainstream brokerage can integrate digital assets into its core platform and meaningfully challenge specialist exchanges. However, if adoption lags, it will indicate that Schwab still needs to refine migration tools, deepen crypto technology integration, and sharpen its competitive edge—demonstrating that winning share from established crypto venues takes more than simply listing BTC and ETH.
About Kiln
Kiln is the leading staking and digital asset rewards management platform, enabling institutional customers to earn rewards on their digital assets, or to whitelabel earning functionality into their products. Kiln runs validators on all major PoS blockchains, with over $11 billion in crypto assets being programmatically staked and running over 5% of the Ethereum network on a multi-client, multi-cloud, and multi-region infrastructure. Kiln also provides a validator-agnostic suite of products for fully automated deployment of validators and reporting and commission management, enabling custodians, wallets, and exchanges to streamline staking or DeFi operations across providers. Kiln is SOC2 Type 2 certified.
