Stocktwits turns into brokerage: Crypto powered by FTX, equities coming soon
Stocktwits is starting out with crypto trading not only because retail investors are increasingly interested in the emerging asset class but also because there are fewer regulatory hurdles to offering crypto trading as opposed to equities.
Stocktwits has announced it is adding cryptocurrency trading as an option for its users within the platform in a milestone for the social-media service for retail investors.
The addition of cryptocurrency trading, powered by FTX, is the first move into the live trading business segment. The platform plans to expand into equities trading later this quarter.
Social trading has grown in popularity to become the norm among retail users. Robinhood, eToro, and many more trading platforms have risen to the top of the food chain within the industry by making it cosier for traders to socialize and grow communities within their platforms.
Stocktwits, on the other hand, has always been a social media platform and now has decided to turn into a brokerage.
Stocktwits, where social goes trading
Stocktwits, which has added about two million registered users over the past two years and now caters to six million, has recently raised $30m in a fundraising round. Alameda Research Ventures, owned by Sam Bankman-Fried, who also owns FTX, is one of the investors.
This has likely facilitated the decision to bring FTX to the table as the US-based cryptocurrency exchange is set to provide the infrastructure for Stocktwits, with the same tiered fee structure that can be found on the FTX platform.
The team anticipates that the platform will continue to grow as they expand on execution functions on the platform and prioritize access to quality data for alternative assets that previously were not available for the average user.
Stocktwits is starting out with crypto trading not only because retail investors are increasingly interested in the emerging asset class but also because there are fewer regulatory hurdles to offering crypto trading as opposed to equities. Still, the platform will soon add stock trading for its established community of users who share information, trading tips, strategies, and data.
Rishi Khanna, Chief Executive Officer at Stocktwits, said: “Stocktwits has built an active community since 2008 through our data tools and social features. The community and data have served as a strong on-ramp into the platform, but the addition of execution on the platform is a key product expansion that will help us to better serve our users.
“You can’t just throw money at it and make social happen. There is a certain aspect of luck and timing that you need to get social really working.”