Some old dogs are learning new tricks
A new crypto exchange is launching in the US.
And sure, FTX, Binance, Crypto.com, Coinbase (plus a slew of others) already have a pretty decent hold on the market in the US...
But this new exchange, EDX Markets, may still have a chance.
Here’s why:
The backers include the two largest U.S. retail brokers, Charles Schwab and Fidelity Investments.
Plus, Citadel Securities and Virtu Financial (two of the biggest trading firms in U.S. stocks), and investment firms Paradigm and Sequoia Capital are all supporting the venture.
So they’ve got:
Money ✓
Resources ✓
Deep knowledge on the traditional finance industry ✓
Plus, Schwab and Fidelity are household names in the US - they’ve been around for years - and with their brands, comes trust.
(Unlike FTX or even Coinbase who had to build their brands up, while simultaneously educating people on why they should invest in crypto).
They also have huge existing customer bases, which will no doubt reduce the cost of acquiring customers significantly.
Here’s what could go wrong:
While their brand's legacy status is in many ways a positive, it could act against them too. Will consumers believe those old dogs can build a sexy new product?
Traditional finance companies aren’t known for moving fast. So there’s a chance that they simply won’t keep up with the tech.
But the biggest issue we see is actually an issue for crypto exchanges as a whole (although it could be great for consumers). Another player in the space is sure to try to undercut their competition on the price of trades (historically known as ‘brokerage fees’).
We’re already seeing ‘trade BTC for free on Binance’ as a loss leader strategy. This new entrant could accelerate the race to the bottom.
Overall though, the more traditional finance companies there are moving into crypto, the more customers they'll bring to the space.
We’ll take it.
