Charles Schwab Chases Gen Z Crowd into Crypto

Charles Schwab is embodying the “How do you do, fellow kids?” meme by making its first foray into crypto trading. The 55-year-old company announced the move during its earnings call on Thursday, when it shared that its quarterly profit jumped more than 30% as trading activity surged across the industry. 

Now, Schwab wants to give clients more assets to move around: digital ones. Schwab said it’ll soon add the top two tokens by market cap, bitcoin and ether, to its platform under the on-the-nose offering name, Schwab Crypto. 

TradFi Blurs Digital Lines

It has been a banner earnings season for Wall Street firms. Schwab averaged a record 9.9 million trades a day in the first quarter, and CEO Rick Wurster tied the frenzied trading activity in part to geopolitical uncertainty swaying investors to hold smaller positions for shorter periods. Small-scale trading activity could surge further in the second quarter, depending on when a decision by regulators to end the $25,000 minimum equity requirement for day traders takes effect. 

Adding crypto could also boost Schwab’s volume as investors, especially Gen Z ones, turn to alternative assets during uncertain times. In adding a crypto offering, Schwab joins a swath of other Wall Street institutions (a.k.a., Traditional Finance or TradFi) looking to compete with younger fintech firms like Robinhood:

• Fidelity Investments was relatively early to the crypto game. In 2022, Fidelity made crypto investing available in its 401(k) plans, and in 2024, it launched a spot bitcoin ETF. It began supporting bitcoin and ether trading in 2023 and later added litecoin and solana. This year, it even launched a stablecoin for trading on its crypto platform. Schwab plans to undercut Fidelity’s crypto trading fee, charging 0.75% per trade compared with Fidelity’s 1%. Schwab’s CEO has previously said that its clients already hold a little crypto, but they’ve had to do so through a competitor. Now, they could move their money back over. 
• Morgan Stanley, meanwhile, recently started a bitcoin ETF while Goldman Sachs filed to create one of its own. Though much of TradFi has stuck to ETFs, which could help to maintain a degree of separation away from the actual assets, Bloomberg reported last year that JPMorgan was quietly considering offering crypto trading to institutional clients. 

Not Your Father’s Firm: Gen Z started investing earlier than other generations and is more likely to pour money into alternative assets, particularly crypto. As boomers age and wealth moves to younger generations, Wall Street is making sure it’s offering the assets Gen Z wants. Traditional institutions could also be looking to up their cred with a generation that might be more familiar with fintech companies that have splurged on self-marketing, like Robinhood and Webull, than Wall Street’s old guard.