A Bullish Game-Changer for Bitcoin & Ethereum?

Key Takeaways:

Charles Schwab intends to roll out spot crypto trading within 12 months.The prices of Bitcoin and Ethereum soared after the announcement.Institutional investors are expected to drive U.S. crypto market growth.

Charles Schwab Launches Crypto Trading amid Race for Retail Investors

Charles Schwab, one of the world’s biggest asset managers, with $7.13 trillion under management, is planning to offer spot cryptocurrency trading within the next year. Company CEO Rick Wurster took a question on the firm’s strategy during a recent earnings call where he said Schwab is “hopeful and likely” to allow for direct crypto transactions by mid-2026. The launch will cover Bitcoin and Ethereum, placing Schwab among traditional financial giants entering the cryptocurrency space.

The shift arrives as public interest in cryptocurrencies grows. Morgan Stanley recently unveiled plans to offer crypto trading to its e-trade clients as part of a larger trend of U.S.-based financial institutions. Anticipation of positive regulatory changes is also driving these efforts.

Schwab’s crypto offer is aimed at investors who already participate in traditional markets but are becoming more interested in digital assets. Recently, the company observed an increase of 400% in traffic to its crypto-related content and potential new clients comprised 70% of these visitors, Wurster said.

The Market Reacted Immediately; Prices Spiked

The news triggered an immediate market reaction. Bitcoin rose by 3.2%, increasing from around $58,400 to $60,270 within an hour of the announcement, as of May 1, 2025, according to CoinMarketCap data. Ethereum followed a similar path, at $2,900 and rising 2.8% to $2,981.

These increases were followed by significant spikes in volume. Bitcoin’s 24-hour volume increased 18% to $32.4 billion and Ethereum’s rose 15% to $14.7 billion, Binance market data shows. Another interesting development on the liquidity front was the tremendous increase in liquidity depth – according to Kaiko Analytics, liquidity depth in BTC/USDT and ETH/USDT pairs improved by an average of 12% within two hours of the announcement.

Such a trend isn’t a new one. Price jumps like this have occurred after other firms have filed a Bitcoin ETF with the SEC: when BlackRock did so, BTC surged 7% in a day. These analogies remind us that institutional moves almost always have short-term effects in the world of crypto.

Schwab Investor Sentiment and Portfolio Diversification Trends

Schwab’s timing is good, because investors’ behavior has been changing. This follows average market clients’ overall bearishness of the stock market that increased in April’s volatility influenced in part by geopolitical tensions and U.S. tariff plans, with 61% of Schwab clients surveyed feeling bearish in Q1 2025 (up from 32%).

Several investors have been reducing risk by selling U.S.-based stocks and reallocating into bonds and non-U.S. stocks. Clients who have exposure to international stocks, bonds and commodities said they were reported stronger resilience.

And now, crypto is increasingly considered another path to diversification. Schwab’s move to offer direct access to cryptos is a cautious approach that should appeal to conservative investors interested in obtaining controlled exposure rather than excessive speculation. The Schwab offering will be geared toward people wanting fractional amounts of popular cryptocurrencies, not the universe of other choices called altcoins, Wurster added.

Schwab Projected Market Impact and Institutional Flows

Analysts anticipate Schwab’s platform launch to generate significant inflows into markets for crypto. Trading activity has already reflected increased confidence. On May 1, Deribit data indicated a 25% rise in BTC call options over the $65,000 strike price, which means traders are feeling bullish. Meanwhile, trading data from Kraken showed a 10% increase in trading activity for BTC/USD and ETH/USD pairs, even as bid-ask spread margins have been diminishing—a sign that market efficiency is up.

Also reporting, Whale Alert said Bitcoin transactions valued above $1 million were up 14%, adding to the notion of institutions buying on the news of Schwab.

Schwab Regulatory Environment Fuels Institutional Confidence

Recent U.S. regulatory discussions have been interpreted as boosting institutional confidence. Wurster, however, cautioned that volatility and allocation issues still pose risks. International regulatory discussions could also boost cross-border involvement. But he said that crypto’s extreme volatility and allocation issues still meant that it was a risk for investors.

Schwab’s Broader Strategy: Expanding Access and Competition

Schwab is broadening its core brokerage business with an investment in the proposed Texas Stock Exchange (TXSE), designed to compete with Nasdaq and the NYSE once approved by year-end. Wurster believes that providing more options for investors — either with new exchanges or on crypto platforms — is important for long-term growth. Schwab’s scale and established platform make it poised to build a bridge between traditional finance and digital assets as crypto becomes more mainstream.

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