In the crypto space, different companies have their own unique ways of expanding and exploring new frontiers - a central theme in 2022.
Though the year is new, some companies in the crypto market have already taken off. Others, not so much.
FTX Isn't Taking Its Foot Off the Gas
Last week, FTX and Bitstamp, two major crypto exchanges, announced they are moving toward offering traditional stocks. Brett Harrison, the president of FTX, confirmed on Twitter that the company is working hard to bring stock trading to its platform.
Harrison explained that FTX plans to integrate several features into its stock offering. These include stock screening, performance data, analytics, and historical candles. FTX customers will be able to enjoy traditional stock trading right along with cryptocurrencies.
This isn't the first time FTX has been linked to traditional stocks. In 2020, the company launched trading in fractional stocks - essentially, tokenized assets representing shares in some of the world's biggest companies.
FTX launched its fractionalized stocks in partnership with German-based investment firm GM-Equity and Digital Assets AG - one of the world's leaders in asset tokenization. The fractionalized stocks feature allowed customers to buy small shares in companies like Tesla, Amazon, and Apple in its initial offering.
"Both crypto trading and equities trading have been steadily attracting a wider audience with new market participants coming in. These fractional stock products reflect the reality that today's traders are industry and sector spanning and want trading opportunities that fully match their interests and mindset," said FTX CEO Sam Bankman-Fried.
Now that the exchange plans to enter traditional stocks full time, FTX is gearing up for another feature that could see its valuation and market share soar significantly.
Bitstamp Hopes to Raise Its Competitive Edge
FTX isn't the only company planning a foray into stocks. Speaking recently with Bloomberg, Robert Zagotta, the chief executive of Bitstamp USA, confirmed that the company is also working on bringing traditional stocks to customers.
While Bitstamp is a top exchange, it's never rubbed shoulders with names like Binance and Coinbase. Offering stocks might not change that, but it will give customers another reason to stay and incentivize new customers to join the platform.
Zagotta said Bitstamp plans to go all-in on investment products, offering access to non-fungible tokens (NFTs), crypto derivatives, and more. He added that the company hopes to create a more "streamlined" experience for customers - numbered at over 4 million at the moment.
Bitstamp understands that stock trading is competitive, but they feel they'll have a strong presence in the space. For now, they're mulling over whether to build a stocks product in-house, work with partners, or acquire a company that offers stocks and integrate its product into theirs.
More Bad News for Robinhood
With all of these companies entering the arena, fintech apps focused exclusively on stocks have reason to be concerned. Robinhood, the popular retail investment app, is on that list.
Retail investors love Robinhood, but the company has had its fair share of challenges. The company's stock is now trading at an all-time low of $13.89. Part of that is due to the general market's terrible performance, but we can't help but notice the company is feeling the competitive squeeze.
It will take a while to see how these new exchanges' entry into stocks will affect Robinhood. But, if Robinhood doesn't get creative to hold on to customers, it could lose out - especially to FTX.
That said, Robinhood does have some bright spots. The exchange has been rumored to be planning a listing for Shiba Inu - one of the industry's top meme coins. Shiba Inu has a massive online community, several of whom will likely rush to Robinhood if it lists the coin. But, this could still be cold comfort when FTX and others start offering stocks.