Morgan Stanley’s Crypto Push With Wallet & Trading Plans

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Good Morning

Morgan Stanley is moving beyond limited crypto exposure and into full product integration. With plans for a proprietary wallet, direct crypto trading on E-Trade, and recently filed spot ETF applications, the firm shows that digital assets are becoming a permanent part of its wealth management stack rather than an optional add on.

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In Today's Email:

• What Matters: Morgan Stanley’s Crypto Push With Wallet & Trading Plans 👀 

• Founders Highlight: Zooko Wilcox-O'Hearn of Electric Coin Company 👨 

• Deal Flows: a16z Crypto Backs Babylon With $15M 💰️ 

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WHAT MATTERS

Morgan Stanley’s Crypto Push With Wallet & Trading Plans

State of play: Morgan Stanley plans to launch a proprietary crypto wallet in the second half of 2026 and roll out Bitcoin, Ether, and Solana trading on its E-Trade platform earlier in the year.

• The move signals a deeper shift toward integrating crypto into its core wealth management offering.

• The announcement follows recent S-1 filings with the US SEC for spot BTC, ETH, and SOL ETFs, highlighting rising institutional demand.

• Morgan Stanley has steadily expanded crypto access from select clients to all accounts, including retirement plans.

• Backed by investments in firms like Zerohash, the strategy reflects a broader Wall Street trend.

Why it matters: Major banks increasingly treat digital assets as a long term priority.

Our take: Crypto is becoming part of standard financial plumbing.

For builders and investors: The opportunity is in infrastructure that large firms can actually use.

BUILDER-INVESTOR HIGHLIGHT

Zooko Wilcox-O'Hearn of Electric Coin Company

Intro: Zooko Wilcox-O'Hearn is the Founder and ex-CEO of Electric Coin Company, a a for-profit company leading the development of Zcash.

Previous background: Zooko Wilcox-O'Hearn is a computer security specialist and cypherpunk best known as a founder of Zcash and former CEO of the Electric Coin Company.

• He previously worked on the first digital cash at DigiCash and built decentralized systems like Tahoe-LAFS.

• He has contributed to core cryptographic tools including BLAKE2 and BLAKE3, and introduced Zooko’s Triangle, an influential concept in identity system design.

• His work consistently centers on privacy, cryptography, and decentralized infrastructure.

The big idea: Zooko Wilcox-O'Hearn’s big idea is that privacy should be built directly into digital systems, not added later.

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INSIGHTS

Optimism Proposes Monthly OP Buybacks

Optimism Foundation has proposed a plan to use 50% of Superchain revenue for monthly over the counter buybacks of the OP token.

• The goal is to better align OP with the growth and usage of the Superchain, which includes major networks like Base and OP Mainnet.

• Over the past year, the Superchain generated 5,868 ETH, roughly $18M, all of which has gone to a governance controlled treasury.

• Under the proposal, buybacks would only occur when monthly revenue exceeds $200,000 and within predefined fee limits.

• Purchased tokens would return to the treasury and could later be burned or distributed as staking rewards.

• While Optimism dominates the Ethereum L2 market with over 62% share, OP has lagged in price performance.

DEAL FLOWS

a16z Crypto Backs Babylon With $15M

Deal flows slowed down this week - we saw $33M+ in deals 💼 

Babylon has secured a $15M investment from a16z crypto to accelerate development of its Trustless Bitcoin Vaults protocol. The funding supports Babylon’s broader goal of building a native Bitcoin liquidity layer that enables BTC to be used in on chain finance without custodians, bridges, or wrapped assets.

• Babylon’s BTCVaults allow Bitcoin to remain on the Bitcoin network while being used as collateral across multiple chains and applications.

• Collateral rules are enforced cryptographically, removing counterparty risk and preserving self custody.

• The system is designed to support borrowing, lending, yield, and other Bitcoin native financial use cases.

• The protocol also introduces direct utility for the BABY token, which is intended to play a role in the usage and operation of BTCVaults.

• Babylon positions this as a step toward unlocking idle Bitcoin capital and aligning token value with real economic activity in native BTC finance.

Deal flows in the past week:

• Boings.ai, Unknown $ Seed Round

• HabitTrade, $10M Series A Round

• ZenChain, $8.5M Unknown Round

• River, Unknown $ Strategic Round

• Ubyx, Unknown $ Strategic Round

• Babylon, $15M Unknown Round

QUICK BITES

• Crypto crime topped $150B in 2025.

• SharpLink stakes $170M in ETH on Linea.

• Senate crypto bill nears 'do-or-die' moment.

• Morgan Stanley continues crypto push, plans wallet.

• Florida to pursue Bitcoin reserve ahead of 2026 session.

• Optimism Foundation proposes monthly OP token buybacks.

• JPMorgan says crypto de-risking is likely over as ETF flows stabilize.

• Spot bitcoin ETFs extend negative streak, reporting $400M in outflows.

• Privacy debate flares days after Europe's DAC8 tax regime takes effect.

• Colombia's tax authority mandates crypto exchanges to submit user data.

NOTEWORTHY READS & MEME

• DeFi Warhol’s read on 5 narratives to watch in 2026.

• a16z crypto’s read on 3 ways crypto goes beyond crypto in 2026.

• The Smart Ape’s story on How He Got Drained After Using Public Hotel WiFi.

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Disclaimer: All the information presented in this publication and its affiliates is strictly for educational purposes only. It should not be construed or taken as financial, legal, investment, or any other form of advice.