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Coinbase introduces stock and ETF trading as it broadens its offerings beyond cryptocurrency.
The initiative positions Coinbase in direct competition with Robinhood as it strives to establish itself as an “everything exchange.”
Coinbase CEO Brian Armstrong (Jesse Hamilton/CoinDesk)
Key points:
- Coinbase has launched stock and ETF trading for all users in the U.S., facilitating 24/5 equity trading alongside cryptocurrency on its platform.
- Diversifying beyond cryptocurrency intensifies rivalry with Robinhood and may assist in detaching the correlation between Coinbase’s stock and the value of bitcoin.
- This expansion is a continuation of Coinbase’s December “everything exchange” initiative and comes after the recent introduction of its predictions market.
Coinbase (COIN) has made stock and exchange-traded fund (ETF) trading accessible to all U.S. users, broadening its offerings beyond digital currencies as part of its ambition to become an “everything exchange.”
This feature enables users to buy and sell U.S.-listed stocks and ETFs on the same platform utilized for cryptocurrency. Trading is available 24 hours a day, five days a week, with zero commission fees. Users can fund their trades using U.S. dollars or USDC and can purchase fractional shares starting from $1.
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Coinbase announced this expansion in December, indicating its intent to consolidate various asset classes under one platform. Earlier this month, it launched a predictions market, allowing users to trade on the results of actual events. The introduction of stock trading represents another advancement in that strategy.
This initiative positions Coinbase in closer competition with retail brokerage firms such as Robinhood (HOOD), which has been enhancing its cryptocurrency offerings. It also signifies a trend among crypto companies to merge cryptocurrency with traditional financial products. Shifting away from a crypto-exclusive business model could enable Coinbase to reduce the connection between its stock price and bitcoin so that it behaves more like a diversified technology stock, providing some stability during periods of crypto market declines.
Both COIN and HOOD have seen a decrease of approximately 35% this year as digital currencies face challenges. EToro (ETOR) has experienced a 13% drop in the same timeframe, although the company’s fourth-quarter results showed robust equity trading on its platform.
To facilitate this launch, Coinbase has partnered with Yahoo Finance. The financial news platform will include a button that allows users to transition from stock research to executing trades on the exchange. Additionally, Yahoo Finance will provide real-time data from Coinbase within its interface.
Coinbase stated it is collaborating with Apex Fintech Solutions for clearing custody and execution services.
The company intends to broaden 24/5 trading to include more stocks in the upcoming months. It has also expressed interest in introducing tokenized stocks, which would enable equities to transact on blockchain networks and potentially trade continuously.
