NEW YORK/PORTLAND (Jan 13): Cryptocurrency exchanges FTX US and Bitstamp Ltd are exploring offering equities trading in the US, a move that’d allow them to diversify while venturing into the territory of traditional financial firms and popular app providers such as Robinhood Markets Inc.
FTX US is working on adding stock and option trading, and a launch could potentially come in “a couple months”, President Brett Harrison reiterated on Twitter on Tuesday. Initial features planned under equity trading include stock screening, display of basic fundamentals such as market capitalisation and P/E ratios, and portfolio performance tracking. A spokesperson for FTX US confirmed that the company is “continuing to look into” future integrations of stock and options trading, without providing additional details.
We’re hard at work on stocks! Features we’re planning for day 1:
-Live BBO and historical candles
-Stock screening/search functionality
-Basic fundamentals (market cap, P/E ratio, dividend yield)
-Portfolio performance tracking, order/trade details
What else should we have?
Brett Harrison (@Brett_FTXUS) January 11, 2022
Bitstamp, one of the oldest active crypto exchanges, is also considering entering new markets such as equities, non-fungible tokens, and crypto derivatives, Bobby Zagotta, CEO of Bitstamp USA Inc, said in an interview, citing “significant investments” in these areas and the advantage of keeping users on the platform for trades across asset classes.
Offering equities trading would create a streamlined experience for Bitstamp’s over 4 million users, but it’s a “very competitive space, and there are some very significant players in it,” Zagotta said. If it decides to pursue these areas of expansion, Bitstamp may build the product in-house or consider acquisitions, which “can be an accelerator from a licensing perspective,” he added.
Cryptocurrency exchanges have been expanding into new business lines to lessen their dependence on trading revenue.
Trading volume at some of the top crypto exchanges has declined during the recent market sell-off, and some analysts say a “crypto winter” could be under the way. Offering equities trading means crypto exchanges could capture meme stock investors, setting them on a path to collide with the likes of Robinhood and eToro, which offer both crypto and stock trading.
Some crypto exchanges provide the trading of tokenised versions of stocks like Apple Inc, and Tesla Inc. that reflect the prices of the securities they track, but that effort has faced regulatory push back. Binance Holdings Ltd, the world’s largest crypto exchange, ceased support of stock tokens last October, just a few months after launching the product.
When asked if Binance would consider offering equities trading, a Binance spokesperson said it’s “going to remain laser focused on developing leading blockchain technologies for our users and expanding into markets that more naturally compliment blockchain’s future.” Coinbase Global Inc, the largest US crypto exchange, declined to comment on whether it’s considering offering equities trading.