How the crypto crisis is changing trading platforms for the better

The world’s second-largest crypto trading platform FTX recently raised some eyebrows when it said its US affiliate will offer zero-commission equities trading. It is a pioneering move; although we have seen some mainstream financial platforms and fintechs, including Robinhood, Block and Sofi, launch crypto wallets, trading or other services, FTX is the first crypto platform to venture into other kinds of financial services and assets.

The move makes sense, as with crypto trading volumes down among the recent market losses and volatility, it is smart for crypto trading platforms to explore other streams of revenue and ways to grow their user base. But, more importantly, in the long run, it signals the arrival of crypto as a more integrated part of the financial services sector, with many of today’s crypto-only platforms becoming one-stop shops for multiple services and asset classes.

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

Offer more assets, including equities and futures
Although FTX continues to search for an equity-trading partner, and it remains unclear what kind of equity trading the platform will ultimately offer, the move should set an example for other crypto platforms.

Investors, including ordinary consumers and retail traders, are increasingly holding both stocks and crypto. That means that platforms dedicated to crypto should add additional assets, like equities and futures, to meet more of their users’ needs. With the demand for equity investing already there, offering stocks is one of the most efficient 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 are helping their users access. A more diverse set of services reflects the rapidly-changing personal financial sector, especially as government bodies consider regulating crypto and more established big players—including Fidelity, which recently said it would offer bitcoin as part of its retirement saving plans–begin offering crypto and crypto-related services. Just as financial companies that resist crypto today are seen as falling behind, today’s crypto platforms that don’t offer other assets will also fall behind.

Embrace 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 found that the volatility of crypto markets is especially suitable for algorithmic trading, and these can outperform traditional buy-and-hold strategies.

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

In addition, algorithms and other AI-based technologies can also help maintain balance and seat risk levels not just in one asset, but in someone’s overall portfolio. For example, systems could automatically divert funds into different asset classes, including into stocks and crypto, depending on market conditions, offering an overall smart investment toolkit. This can be a valuable way for platforms to differentiate themselves in a crowded market, where perks like free trades are no longer enough to attract users.

Explore creative savings and wealth-building programs
Crypto platforms looking to diversify should also think about including mechanisms for saving and wealth management. It is true that crypto trading has long been something that is very much about the excitement in the present moment. But this is changing as crypto becomes more integrated into people’s financial lives. A savings element could become increasingly important as users shift more of their money to these platforms in order to invest in other assets like stocks. 

Building on the creativity and tech-savviness that won them fast growth and success, especially among younger consumers, today’s crypto platforms can explore different possibilities for savings or wealth management. Programs could include rounding up the money put into trades to the closest dollar, and then funnelling the rounded-up amount into a longer-term investment. Coupled with trading platforms, there are endless possibilities for creative savings or longer-term financial planning schemes. With fears of recession or economic downturn looming, this is an especially appropriate moment to provide savings or other long-term investing options. Platforms could also offer carbon offsets and other sustainability efforts.

Despite what happens to value or volumes on crypto markets, crypto platforms will benefit and better serve their customers by adding new services and features. Not only will it help expand business today, but will prepare platforms for the future, when crypto is simply one piece of the wider financial world.