Schwab's new crypto service will struggle to compete with ETFs, says analyst

ETF analyst Eric Balchunas predicts that Charles Schwab's planned cryptocurrency trading service will face significant challenges in competing with existing ETF products, U.Today reported. The major U.S. financial firm recently announced its intention to launch the service on its trading platform. Balchunas explained that while Schwab's offering would be a better choice for beginners than crypto exchanges due to its fee structure, it falls short when compared to ETFs. He noted that Schwab's fee is 0.75%, whereas ETF fees can be as low as 0.02%. However, he added that directly owning coins offers a significant long-term advantage, as there are no annual management fees. This could offset the higher initial trading costs for those planning to hold Bitcoin for extended periods. Balchunas suggested a rule of thumb: direct purchases are preferable for those intending to hold for more than five years, while ETFs are the best option for shorter-term investments.