E*TRADE does not offer cryptocurrency trading through its main brokerage platform

E*TRADE's standard investment account does not let you buy, sell, or hold Bitcoin, Ethereum, or other cryptocurrencies. The platform focuses on stocks, bonds, mutual funds, ETFs, and options. If you want to trade crypto, you will need to use a separate platform or brokerage that specializes in digital assets.

This is a deliberate choice by E*TRADE's parent company Morgan Stanley. The firm has decided not to integrate crypto into its core brokerage offering, even as some competitors have added it. That means you cannot move money from your E*TRADE cash account directly into crypto the way you might buy a stock.

Key Takeaways

  • E*TRADE does not support cryptocurrency purchases or holdings on its main platform as of now.
  • You will need to open a separate account with a crypto exchange or brokerage if you want to trade digital assets.
  • E*TRADE does offer crypto-focused ETFs and funds that track cryptocurrency prices without requiring you to own the coins directly.
  • Some E*TRADE competitors like Fidelity and Charles Schwab have added crypto trading, but E*TRADE has not followed.

Crypto ETFs and funds available through E*TRADE

While E*TRADE does not let you own cryptocurrency directly, you can invest in funds and ETFs that track crypto prices. These products hold the actual coins or futures contracts, so you get price exposure without managing a digital wallet or private keys yourself.

Bitcoin ETFs and Ethereum ETFs are available to trade through your E*TRADE account just like any other fund. You can also find crypto-focused mutual funds. The advantage is that these sit in your regular brokerage account, they report to the IRS on standard tax forms, and you do not have to worry about exchange security or wallet management.

The trade-off is that you do not own the underlying cryptocurrency. You own a share of a fund that owns it. This matters if you believe in holding actual coins or if you want to transfer crypto to another wallet or exchange.

Why E*TRADE has not added direct crypto trading

E*TRADE's parent company Morgan Stanley has been cautious about cryptocurrency. The firm has stated concerns about volatility, regulatory uncertainty, and the operational complexity of running a crypto exchange. Morgan Stanley's wealth management division has also focused on crypto exposure through funds and ETFs rather than direct holdings.

This is different from Fidelity, which launched its own crypto trading platform, or Charles Schwab, which added Bitcoin and Ethereum trading to its main platform. E*TRADE's decision reflects a more conservative approach to the asset class, even as institutional interest in crypto has grown.

How to trade crypto if you use E*TRADE

If you want to trade actual cryptocurrencies, you will need to open a separate account with a crypto exchange or a brokerage that offers crypto. Popular options include Coinbase, Kraken, Gemini, and Crypto.com. You can also use traditional brokerages like Fidelity or Charles Schwab if you prefer to keep everything in one place.

The process is straightforward: open an account with the crypto platform, complete identity verification, link a bank account or transfer funds from E*TRADE, and then buy or sell crypto. You will manage two separate accounts — your E*TRADE brokerage account and your crypto account — but this is common for investors who want both traditional and digital assets.

Keep in mind that moving money between accounts takes time, usually one to three business days for bank transfers. If you plan to trade crypto actively, having funds already in your crypto account makes more sense than moving money back and forth from E*TRADE.

Tax reporting for crypto held outside E*TRADE

If you buy and sell cryptocurrency on another platform, you are responsible for tracking your gains and losses. The IRS treats crypto as property, not currency, so each sale is a taxable event. You will need records of what you paid, what you sold it for, and when the transaction happened.

Most crypto exchanges provide a tax report or export function that shows your transaction history. You can use this to fill out Form 8949 (Sales of Capital Assets) when you file your taxes. E*TRADE will not report your crypto activity because it does not hold the assets, so the burden is on you to keep records.

This is one reason some investors prefer crypto ETFs through E*TRADE — the fund handles the tax reporting, and E*TRADE reports it to you on a standard 1099 form, just like any other investment.

Comparing E*TRADE to brokerages that offer crypto

If crypto trading is important to you, it is worth comparing E*TRADE to platforms that have added it. Fidelity offers Bitcoin and Ethereum trading through its brokerage account, with no separate login or account needed. Charles Schwab added crypto trading to its platform as well. Coinbase and Kraken are pure crypto exchanges with more coin options but less integration with traditional investing.

The choice depends on what matters to you. If you want everything in one account and do not need a huge range of coins, Fidelity or Schwab might be better. If you want access to hundreds of cryptocurrencies and advanced trading tools, a dedicated crypto exchange is the way to go. If you are happy with E*TRADE for stocks and bonds and only want crypto exposure through funds, the crypto ETF route works fine.

Frequently Asked Questions

Can I buy Bitcoin or Ethereum through E*TRADE?

No, E*TRADE does not offer direct cryptocurrency purchases. You can buy Bitcoin and Ethereum ETFs through E*TRADE, which track the price of these coins without requiring you to own them directly. For actual coin ownership, you will need to open an account with a crypto exchange or a brokerage like Fidelity or Charles Schwab.

Are crypto ETFs the same as owning actual cryptocurrency?

No. A crypto ETF holds the actual coins or futures contracts, but you own shares of the fund, not the coins themselves. You cannot transfer the coins to another wallet or exchange. The advantage is simpler tax reporting and no need to manage security or private keys.

Will E*TRADE add crypto trading in the future?

E*TRADE has not announced plans to add direct cryptocurrency trading. Morgan Stanley, its parent company, has chosen to focus on crypto exposure through funds and ETFs rather than direct holdings. This could change, but there is no public timeline for it.

What happens if I transfer money from E*TRADE to a crypto exchange?

You can link your bank account to a crypto exchange and transfer money from your bank, which takes one to three business days. You cannot transfer directly from E*TRADE to a crypto platform. You would need to withdraw cash from E*TRADE to your bank first, then move it to the crypto exchange.

Do I have to report crypto gains if I trade on another platform?

Yes. The IRS treats each crypto sale as a taxable event. You must track your purchase price, sale price, and transaction date, then report the gain or loss on your tax return. Most crypto exchanges provide transaction reports to help you do this.