We know this guy’s going to be happy about the news:
Competition Among Crypto Trading Platforms Heats Up
The traditional Wall Street firm enters a crowded field of early movers in the crypto trading space, including leaders such as Coinbase and Square’s Cash App.
Nathaniel Popper, a tech journalist at The New York Times, was also tipped to the development. He points out that the move comes after TD Ameritrade began to quietly offer bitcoin trading for select customers:
In the wake of TD Ameritrade quietly opening Bitcoin trading for some of its customers, I was just told that eTrade is preparing to begin offering both Bitcoin and Ether trading to its 5 million or so customers and is just finalizing a third party to actually hold the coins.
— Nathaniel Popper (@nathanielpopper) April 26, 2019
E-Trade will also go head-to-head with commission-free stock trading app Robinhood. The finance “outlaw” app is a favorite among millennials for its ease of use and zero brokerage fees.
Robinhood briefly overtook E-Trade based on the number of trading accounts in May 2018. E-Trade apparently hasn’t forgotten.
No doubt the appeal of cryptocurrency to the younger generation was a major draw for Robinhood’s already millennial-friendly platform. Robinhood recently secured the coveted BitLicense to operate in New York, as did Bitstamp.
E-Trade stands to capture a good chunk of the millennial trader market share by adding digital currencies. In fact, 43% of millennials say they trust cryptocurrencies more than the stock market. Meanwhile, 25% of millennials are already using or saving crypto assets.
Unleashing E-Trade’s 5 Million Customers
Reports suggest that E*Trade is “unleashing” crypto onto its customers. Truth is, the company is really unleashing its 5 million trading accounts onto the bitcoin and Ethereum markets.
Like Square’s Cash App or Coinbase, E-Trade customers who purchase cryptocurrency will not be given the private keys to their own coins.
E-Trade is reportedly finalizing talks with a third party for digital asset custodial services of customer accounts. This, no doubt, is not an optimal service for bitcoin “hodlers” or those looking to save large amounts of bitcoin and ether for the future. They will prefer to have the private keys in their own possession.
An entire industry has grown around the need to secure private keys in cold storage hardware wallets. But an onslaught of E-Trade day traders will clearly infuse the market with massive amounts of liquidity and velocity.
Day traders love markets with the precise characteristics of crypto, including volatility.
About The Author
Grew up reading Isaac Asimov, J.R.R. Tolkien, The Bible, Ayn Rand, John Locke, and Robert Heinlein while listening to conservative talk radio, reading used economics textbooks, and reading through most mainstream political newspapers and magazines.