An E-Trading Pioneer’s Foray Into Cryptocurrency
- E*TRADE boasts market cap of $12.4 billion, versus Coinbase at $8 billion and Robinhood at $5.6 billion
- Both fintech startups have yet to turn a profit, while E*Trade grew earnings by 17% in Q1 2019
- E*TRADE will start offering Bitcoin and Ethereum trading, and consider other coins in the future
- All players face headwinds such as regulatory uncertainty, market manipulation and abuse in the new cryptocurrency industry
beginning : Bloomberg
Bitcon Jumps Despite Headwinds
E*TRADEs entrance into the digital currency space comes at a time when the once bolshevik hot market is in agitation, with crypto prices drastically below their 2017 highs. While Bitcoin has rallied about 40 % over the holocene two months, the populace ’ mho largest digital currentness remains approximately 70 % below its point in December 2017, right before the crypto-bubble abound and bitcoin closely score $ 20,000 .
meanwhile, the space has become roiled by allegations that a major crypto operation, which runs the Bitfinex substitute and crypto ship’s company Tether Ltd., hid $ 850 million in losses in customer and bodied funds from investors and dipped into Tether ‘s cash reserves to fill the break. The event reportedly protected large investors, whose cash was held by custodian banks in New York, but hurt small investors, whose funds were sent to firms around the global, according to two people with cognition of the topic interviewed by Bloomberg .
The holocene scandal illustrates just how fickle the new and chartless cryptocurrency quad that E*TRADE is entering can be. Over the past 18 months, cloudy regulation and reports of market handling have attributed to the major shed in crypto prices. initial Coin Offerings ( ICOs ) have fallen from a whack $ 5.8 billion in June of last class, to $ 208.6 million in May 2019, according to Bloomberg data .
How E*TRADE Stacks Up Against Rivals
The New York City-based e-trading pioneer will head off against startups like Coinbase Inc., which have made names for themselves as go-to places for such transactions. Coinbase reached a valuation of $ 8 billion in 2018 and projected sales of $ 1.3 billion. Fintech startup Robinhood, a zero-fee deal platform democratic among millennials and most recently valued at $ 5.6 billion, has besides added cryptocurrency trade as a room to woo young customers .
E*TRADE ’ s competitive advantages over its newfangled competitors include its longstanding reputation in the fiscal services universe, where it has been a musician since the early 1980s. The platform had more than 7 million users as of March 31, 2019 and average over 279,000 trades per day in Q1 2019, according to the The Wall Street Journal. While Robinhood and Coinbase have the early-mover advantage, they have so far to turn a profit, and many remain disbelieving of the millennial-targeting businesses. E*Trade, on the other hired hand, saw a 17 % jump in profits in the latest quarter over last class, while total sales increase 7 % to $ 755 million. The on-line brokerage fast ’ s size and maturity, including its wide suite of brokerage house services, could draw in electric potential clients away from its smaller competitors .
initially, E*TRADE will enable trade for just Bitcoin and Ether, the two largest digital assets by market capitalization, before considering other digital coins for the future, according to the person familiar with the matter.
E*TRADE ’ mho foray into the explosive cryptocurrency quad would mark a major milestone for the burgeoning industry as it attempts to push into the mainstream and gain credibility with institutional investors. A major brokerage launching cryptocurrency deal would provide a solid amount of authenticity for digital asset trade, reeling in bigger investors .