US crypto trading platforms FTX and Bitstamp may start offering stock trading to their clients in a bid to compete with popular platforms such as Robinhood and eToro.
FTX US President Brett Harrison tweeted earlier this week that the company is “working hard on stocks!” He added that the exchange hopes to add features such as live prices, company data, portfolio performance tracking, and more. Bloomberg.
The report added that it was not yet clear whether the company would attempt to become an official stock exchange such as the New York Stock Exchange or the Nasdaq.
Crypto Brokerage Divisions
Many crypto exchanges use brokerage arms through which users make transactions that are directed to the exchange, he added. A similar system works with stocks with companies such as Robinhood operating as a brokerage platform for exchanges such as the NYSE.
Bitstamp USA is also reportedly investigating stock trades, NFTs (non-fungible tokens), and crypto derivatives. According to general manager Robert Zagotta, it’s a “very competitive space, and there are some very important players.”
The exchange, which is one of the oldest, is expected to make large investments and acquisitions in order to enter the field of stock trading.
An alternative offered by some exchanges is token stocks called synthetics. However, it drew a heavy-handed response from regulators, particularly in the United States. Binance started offering them last year, but abruptly pulled the assets in America following a flurry of regulatory backlash.
As for the world’s largest exchange offering stock trading, a Binance spokesperson told Bloomberg that it “will remain focused on developing cutting-edge blockchain technologies for our users and expanding in markets that more naturally complement the future of blockchain.”
The US division has secured a number of high profile sports partnerships and advertising deals in 2021 as it tries to dominate in a highly regulated market. In December, FTX’s overall valuation rose to $32 billion following another large round of funding.
According to CoinGecko, FTX is currently processing $1.7 billion in daily spot trading volume, which is far behind Binance with $17 billion in daily volume. The exchange is best known for derivatives, however, with a daily volume of $9 billion, FTX is the third largest crypto derivatives exchange in the world.