Kraken To Implement Stock Trading
In a significant shift from its cryptocurrency origins, Kraken, a seasoned name in the crypto world, has unveiled plans to introduce trading of US-listed stocks and exchange-traded funds (ETFs). This ambitious venture will kickstart through a newly established division, Kraken Securities.
An insider, choosing to remain anonymous, disclosed that this new service aims to cater to both US and UK markets. While Kraken has already secured the essential regulatory permissions in the UK, the company is presently in the application phase for a broker-dealer license in the US with the Financial Industry Regulatory Authority. Anticipation is building around a potential 2024 launch for this novel offering.
Kraken’s Legacy and the New Challenge Ahead
Since its establishment in 2011, Kraken has steadfastly weathered multiple bear markets, distinguishing itself from others like FTX and Celsius Network that faced tumultuous times. Its decision to branch into stock trading surfaces almost two years post Bitcoin’s record high of nearly $69,000, a time which heralded a “crypto winter”, subsequently affecting industry appeal and trading volumes.
However, Kraken’s strategic move, led by CEO Dave Ripley, faces its set of challenges. As it dives into the stock market, it will be competing with entrenched zero-commission giants such as Robinhood Markets Inc. and Public.com. This entry is particularly noteworthy as the surge in retail trading, amplified by the pandemic, appears to be simmering down.
A feature to watch out for post-launch will be Kraken’s integrated portfolio view. Eligible users will have the unique experience of observing their crypto, stocks, and ETFs amalgamated into a singular balance.
Kraken’s Expansion and the Competitive Landscape
Besides its venture into stock trading, Kraken is diligently enhancing its prime brokerage services. There are whispers about an impending launch of a qualified custodian tailored for institutional clientele. This distinct custody service seeks to operate independently from the main exchange, with approvals sought from Wyoming’s state authorities.
While Kraken’s official channels have refrained from commenting, it’s evident from recent trends that Kraken has managed to expand its market presence, especially at the expense of Binance, a platform founded six years post Kraken’s inception. Data suggests that at a 3.5% share, Kraken’s contribution to global spot trading is currently at its pinnacle since 2018.
Kraken’s pivot towards the stock trading arena exemplifies the evolving nature of the financial world. As lines blur between traditional finance and cryptocurrency, the real question is, are we witnessing the birth of a new financial ecosystem or merely a transient phase of experimentation? Time, as always, will be the ultimate arbiter.