How the Crypto Crisis is Changing Trading Platforms for the Better


FTX, the world’s second-largest crypto-trading platform, recently raised some eyebrows when it said its US subsidiary would offer commission-free stock trading. It is a pioneering initiative; Although we have seen some mainstream financial and fintech platforms including Robinhood, Block and Sofi launch crypto wallets, trading services or other services, FTX is the first crypto platform to venture into other types of services and financial assets.

The move makes sense, as with crypto trading volumes declining amid recent market losses and volatility, it makes sense for crypto trading platforms to explore other revenue streams and ways to grow their business. user base. But, more importantly, in the long term, it signals the arrival of crypto as a more integrated part of the financial services industry, with many current crypto platforms becoming one-stop-shops for multiple services and asset classes.

Therefore, in order not only to survive the current market downturn, but also to position themselves as more comprehensive financial service providers in the long run, crypto trading platforms must make changes or be left on the sidelines.

Offer more assets, including stocks and futures

Although FTX continues to search for a stock trading partner and it is still unclear what type of stock trading the platform will eventually offer, this decision should serve as an example for other crypto platforms. .

Investors, including ordinary consumers and retail traders, are increasingly holding both stocks and cryptos. This means that dedicated crypto platforms should add additional assets, like stocks and futures, to meet more of their users’ needs. With the demand for equity investing already there, offering equity is one of the most effective ways to capture more value from existing users, while adding value to their services in the eyes of the users themselves.

Platforms should view stocks and other assets not as competitors to crypto, but simply as part of the overall financial landscape they help their users access. A more diverse set of services reflects the rapid evolution of the personal finance industry, especially as government bodies consider regulating crypto and larger, more established players, including Fidelity, which recently announced it will offer bitcoin as part of its retirement savings plans. cryptography-related services. Just as financial companies that are crypto-resistant today are seen as lagging behind, today’s crypto platforms that don’t offer other assets will also fall behind.

Adopt smart trading tools

Crypto trading platforms have been among the leaders in offering advanced trading tools to retail investors. Long used by institutions like hedge funds, advanced tools like algorithmic trading are key to helping investors navigate volatile markets. Academic studies have shown that the volatility of crypto markets is particularly suited to algorithmic trading, and these can outperform traditional buy and hold strategies.

These advanced trading tools not only aim to deliver higher returns, but also provide convenient and personalized services to users, allowing them to automate trading and set risk levels of their choice. Crypto platforms that want to stay relevant need to offer these advanced tools not only for cryptocurrencies, but also for other asset classes, like stocks.

Additionally, algorithms and other AI-based technologies can also help maintain balance and levels of risk not just in an asset, but in someone’s overall portfolio. For example, systems could automatically divert funds to different asset classes, including equities and crypto, based on market conditions, providing an all-encompassing smart investing toolkit. This can be a valuable way for platforms to differentiate themselves in a crowded market, where perks like free exchanges are no longer enough to attract users.

Discover creative savings and wealth-building programs

Crypto platforms looking to diversify should also consider including savings and wealth management mechanisms. It is true that crypto trading has long been about the excitement of the moment. But that is changing as crypto becomes more integrated into people’s financial lives. A savings element could become increasingly important as users transfer more of their money to these platforms to invest in other assets like stocks.

Building on the creativity and technological savvy that have earned them rapid growth and success, especially with younger consumers, today’s crypto platforms can explore different opportunities for savings or wealth management. . Programs could include rounding the money invested in transactions to the nearest dollar, then routing the rounded amount to a longer-term investment. Coupled with trading platforms, there are endless possibilities for creative savings or longer-term financial planning plans. With fears of a recession or economic slowdown looming, now is a particularly good time to provide savings or other long-term investment options. The platforms could also offer carbon offsets and other sustainability efforts.

Despite what happens to value or volumes in the crypto markets, crypto platforms will benefit and serve their customers better by adding new services and features. Not only will this help grow business today, but prepare the platforms for the future, when crypto is just one part of the broader financial world.

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