When Brokerages Set Their Sights on Cryptocurrency Trading

The reshuffling of traditional brokers in the face of crypto natives is already upon us. "I've been having conference calls until 2 AM every day recently." The speaker is a veteran finance professional who has been in the traditional brokerage industry for over a decade. Despite his tired eyes, his tone remains nonchalant. His office in Beijing’s Xicheng District is humble, with peeling doors and dust floating in the afternoon light. He spends his days navigating regulation, business cooperation, and project scheduling. Having started in finance over a decade ago, surviving the last financial crisis and managing global teams, he has recently shifted focus toward virtual assets — a direction once deemed "uncertain" by traditional finance.

The Early Signs: Robinhood’s Crypto Pivot

Traditional finance’s interest in Web3 didn’t start in 2025. Robinhood, known for zero-commission stock trading, launched Bitcoin and Ethereum trading features as early as 2018. Initially a minor product addition, it allowed users to buy cryptocurrencies as easily as stocks, without wallets or blockchain knowledge. By Q4 2024, crypto trading accounted for over 35% of Robinhood’s net revenue, with trading volume surging 455% and revenue up 733% year-on-year to $358 million. In Q1 2025, crypto contributed over 27% of total revenue, with trading revenue doubling year-on-year to $252 million.

Source: IO.FUND

Robinhood’s success was driven not by technology but user demand. Crypto trading evolved from a niche to the core growth engine, prompting Robinhood’s gradual transformation into a digital asset trading platform.

The Traditional Finance Wave in Crypto

Following Robinhood’s lead, 2025 saw traditional finance institutions decisively enter crypto markets:

• March 2025: Charles Schwab, managing over $10 trillion, announced plans to launch spot Bitcoin trading within a year.
• May 2025: Morgan Stanley integrated BTC and ETH trading on its E*Trade platform.
• May 2025: JPMorgan, historically critical of crypto, allowed clients to purchase Bitcoin.
• July 2025: Standard Chartered began offering spot Bitcoin and Ethereum trading to institutional clients.
These giants control vast financial infrastructure and assets worth hundreds of trillions, dwarfing the $4 trillion crypto market cap.



Source: Steemit Community

They are building crypto trading networks within traditional compliance frameworks. Controlling account opening, fund flows, and customer relationships grants them pricing power and influence previously held by crypto exchanges. "Crypto trading platforms should start to feel anxious," the finance veteran warns. The anxiety stems not just from new entrants or policies but from a fundamental shift: crypto platforms may no longer be the sole dealers at the financial table.

Strategies to Stay Relevant

An insider at a crypto trading platform describes replying to messages at 5 AM, juggling cooperation, progress monitoring, and community feedback with little sleep. "We can only seek survival amid anxiety," he says. Competition is fierce due to limited growth and external pressure. Traditional finance is encroaching on core crypto platform capabilities — fiat deposits, custody, account openings, and spot matching — backed by licenses and millions of users. In response, nearly all crypto platforms have launched tokenized stock products, allowing users to trade traditional stocks like Apple or Tesla via USDT or on-chain contracts. This has become an industry-wide defensive move. Bybit led this trend, launching U.S. stock tokens within two months by partnering with XStocks. They see centralized platforms’ advantages in real users, liquidity, and trading depth as hard to replicate. The 24/7 nature of crypto trading opens liquidity opportunities for traditional assets, especially during market closures or regulatory restrictions. Emily, Bybit’s spot trading head, acknowledges tokenized stocks are early-stage with less enthusiasm than new tokens but remains optimistic about their role in bridging crypto and traditional finance through DeFi, synthetic assets, and on-chain staking. However, many view these efforts as passive defense rather than growth drivers.

Tokenized Stocks: From Innovation to Tourniquet

Tokenized stocks are not new. FTX pioneered them in 2020 with pairs like TSLA/BTC and AAPL/USDT, aiming to challenge traditional pricing models. That era was marked by crypto’s aggressive spirit, seeking to rewrite finance with blockchain. FTX anticipated brokerages as future competitors and took initiative. After FTX’s collapse, tokenized stocks became a stopgap rather than a spearhead. Data shows initial community interest faded quickly, with tokenized stock trading volumes lagging far behind meme coins on Solana, which surged on social media hype.



Source: Dune, gmgn

New features alone don’t attract users. The key question is whether these features help platforms reclaim lost ground.

Compliance: Illusion or Reality?

Almost all crypto platforms now emphasize compliance, applying for licenses, restructuring, and hiring traditional finance veterans to appear more legitimate. Yet, traditional finance insiders see this as superficial. "Many get licenses from small countries, but these aren’t recognized by major players," the veteran explains. "Getting to the table means connecting to mainstream banks, clearing networks, and earning regulatory trust." Crypto platforms often grew in regulatory gray areas, lacking transparent customer structures, risk controls, and auditability required by traditional systems. This was tolerated when crypto faced little competition. Now, traditional institutions operate by their rules, exposing crypto’s compliance weaknesses. Some platforms try offshore trusts and business splits, but many regulators remain skeptical, cooperating superficially without genuine acceptance. Bybit stands out, having obtained the European MiCA license and opened a European HQ in Vienna. Emily notes regulators now better understand crypto’s business and technology, making cooperation more feasible. Bitget’s Chinese head, Xie Jiayin, reports multiple virtual asset licenses and ongoing MiCA applications to secure stable European operations. Still, such cases are rare. Most platforms lack licenses, networks, and trust, and face high barriers to transformation while competing with both traditional finance and crypto natives. Compliance efforts often stem from anxiety rather than strategy.

The Midpoint of the Game

At 5 AM, Xie Jiayin answers user questions about tokenized stocks, compliance, and platform updates. Late nights are routine. Meanwhile, in Beijing, a Hong Kong brokerage executive discusses cooperation with listed companies, and in Vienna, Bybit’s European HQ celebrates its opening after MiCA approval. Different places, different rhythms, but shared sentiments: "The pace of change is too fast," "We must take it slow," and "We are figuring out the way forward." Crypto platforms are no longer the central players commanding all traffic and narratives. They stand at the edge of a new order, gradually displaced by complex systems and massive capital. They continue launching features and announcements, adapting their communication and integration strategies — some by choice, others by necessity — striving to maintain relevance.

Looking Ahead: Optimism Amid Uncertainty

Not everyone is pessimistic. Both Xie Jiayin and Emily believe crypto’s impact on traditional finance outweighs the pressure from incumbents. They welcome traditional institutions entering the market, seeing it as a necessary evolution requiring new players and participants. Centralized platforms are expanding into institutional clients, wealth management, and asset allocation, merging crypto and traditional finance worlds. Yet, anxiety remains. Questions linger:
• Will regulators truly allow crypto platforms to operate?
• Will traditional finance co-build or replace crypto platforms?
• Can crypto platforms redefine themselves before the next industry shift?
No one answers confidently. For now, they hold meetings, modify products, apply for licenses, and await feedback — maintaining status quo while seeking opportunities to regain initiative. Waiting for the next wave of industry reshuffling.

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Source: Originally published at ChainCatcher on Mon, 04 Aug 2025 12:26:52 GMT

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ChainCatcher reminds readers to view blockchain rationally, enhance risk awareness, and be cautious of virtual token issuances and speculation.

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Frequently Asked Questions (FAQ)

Traditional Brokerages and Crypto

Q: What is the impact of traditional brokerages entering the cryptocurrency market? A: The entry of traditional financial giants like Charles Schwab, Morgan Stanley, and JPMorgan into the crypto market signifies a significant shift. These institutions leverage their vast financial infrastructure and client bases to offer crypto trading, potentially challenging existing crypto-native platforms and influencing market dynamics. Q: How are traditional brokerages changing the crypto landscape? A: By integrating crypto trading within their established compliance frameworks and customer relationship management systems, traditional brokerages are gaining pricing power and influence. This move suggests a maturation of the crypto market, bringing it closer to traditional financial systems. Q: What is Robinhood's role in the traditional finance adoption of crypto? A: Robinhood's early introduction of Bitcoin and Ethereum trading in 2018, which grew to account for a substantial portion of its revenue, demonstrated the potential for crypto to be a significant growth engine. Their success highlighted user demand as a key driver for this pivot.

Crypto Platform Strategies

Q: What defensive strategies have crypto platforms adopted in response to competition? A: Many crypto platforms have launched tokenized stock products, allowing users to trade traditional assets like Apple or Tesla using cryptocurrencies. This is seen as an effort to retain users and bridge the gap between traditional finance and the crypto world. Q: What are the challenges faced by crypto platforms competing with traditional finance? A: Crypto platforms face challenges in replicating the licenses, established compliance frameworks, large user bases, and deep liquidity that traditional financial institutions possess. Their historical operation in regulatory gray areas is now being exposed as a weakness. Q: How important is compliance for crypto platforms to remain relevant? A: Compliance is crucial for crypto platforms to gain trust and connect with mainstream financial systems. Obtaining licenses from recognized regulatory bodies and establishing transparent customer structures and risk controls are key to competing with traditional finance.

Tokenized Stocks and Future Trends

Q: What is the significance of tokenized stocks in the current market? A: Tokenized stocks, while not a new concept, have evolved from an aggressive growth strategy to a more defensive measure for crypto platforms. They represent an attempt to attract users interested in traditional assets and leverage the 24/7 trading environment of crypto. Q: What are the future outlooks for traditional finance and crypto integration? A: The increasing involvement of traditional finance in crypto markets suggests a merging of worlds. The core questions remain whether regulators will fully embrace crypto platforms, if traditional finance will collaborate with or replace existing crypto entities, and if crypto platforms can adapt to survive and thrive in this evolving landscape.

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Crypto Market AI's Take

The increasing integration of traditional brokerages into the cryptocurrency space, as highlighted in this article, represents a significant maturation of the digital asset market. At Crypto Market AI, we believe this trend is a natural evolution, driven by growing investor demand and the increasing acceptance of cryptocurrencies as a legitimate asset class. Our platform leverages advanced AI and machine learning to navigate this complex landscape. We provide tools for in-depth market analysis, automated trading strategies, and robust risk management, aiming to empower both individual and institutional investors. The challenges faced by crypto-native platforms in terms of compliance and infrastructure are precisely where our focus on secure, compliant, and technologically advanced solutions comes into play. We see this as an opportunity for innovation, where AI can bridge the gap between traditional finance and the decentralized world of crypto, offering a more accessible and efficient trading experience for everyone. For a deeper understanding of how AI is shaping trading strategies, explore our insights on AI-driven crypto trading tools. Furthermore, staying informed about market dynamics is crucial; our news hub provides real-time updates and expert analysis to help navigate these evolving markets.

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More to Read:

• The Future of Trading: How AI is Revolutionizing Investment Strategies
• Navigating the Regulatory Maze: Compliance for Crypto Exchanges
• Understanding Tokenized Assets: The Next Frontier in Finance?
• Why Traditional Banks Are Embracing Digital Assets