With crypto rates for most coins having tanked over the past few weeks, at least one crypto exchange is considering that brokering old school stock trading may be a good option for its users who aren’t just looking to “HODL.” You know, the good old “stable,” “reliable,” and always “fair” stock market (yes, it’s sarcasm) compared to that newfangled, volatile digital currency.
A limited number of American users of crypto exchange FTX.US were allowed to use a stock trading service Thursday. The exchange plans to open up the service to all U.S. users in a few month’s time. Customers are restricted in stock options for a limited set of companies including Apple, Visa, and a few others.
The Wall Street Journal first reported based on an interview with FTX.US President Brett Harrison that the platform will offer commission-free online trading, similar to existing systems like Robinhood and Block’s Cash App. FTX’s choice is an interesting one given how much fire Robinhood’s app has come under for its failed handling of the Gamestop shorting affair last year. Compared to other online trading platforms, FTX plans to not route customer orders to traders, a controversial system called “payment for order flow.”
Harrison told the Journal they don’t expect to initially make a profit off this new service. Still, the FTX.US president told Fortune they see “enormous benefit” to having crypto and stock trading in the place. They also expect to break into futures trading as well.
The $8 billion FTX.US was founded by the 30-year-old asset trading billionaire Sam Bankman-Fried, who just recently said the bitcoin network “has no future” as a form of payment in an interview with the Financial Times.
Yet the wild-haired founder also announced in Securities and Exchange Commission filings just last week he bought a near 8% stake in Robinhood worth nearly $482 million, buoying the flailing company’s stock price. While he’s previously said he doesn’t plan to influence Robinhood’s decision making, even with the suspect timing, Bankman-Fried has become known for trying to establish rules within the crypto trading space, and perhaps he’s looking to traditional stocks as a way of creating a more-centralized crypto backbone.
But with the stock market not doing so hot right now, the timing of the rollout is even more curious. The S&P 500 has fallen more than 16%, approaching a bear market, marking pessimism for near future economic outlook. Major tech companies, which have for years been the most profitable in the world, have been hit hard in their first quarter earnings reports.
Everyone seems to want to get into crypto these days, including the likes of Napster. Robinhood and Block both introduced crypto trading along with traditional stocks later in their lifespans, but FTX is taking the opposite tact. The platform had already broke into derivatives and NFTs, but the company will face competition from the likes of big names like Fidelity and Charles Schwab who recently entered the online trading scene.