Kraken to Offer US Stock and ETF Trading
Crypto exchange Kraken is planning to expand its services by offering trading of US-listed stocks and exchange-traded funds (ETFs) through its newly established division, Kraken Securities. According to Bloomberg, Kraken has obtained the necessary regulatory approvals in the UK and is in the process of applying for a broker-dealer license in the US. The launch of these new services is targeted for 2024.
Competition with Zero-Commission Platforms
Kraken’s entry into the stock trading market will put it in direct competition with existing zero-commission platforms like Robinhood and Public.com. This move comes at a time when the retail trading boom, fueled by the pandemic, has started to decline.
Combined Portfolio Balances
Once the stock trading feature becomes available, eligible Kraken customers will be able to activate the service and see a combined balance of cryptocurrencies, stocks, and ETFs in their portfolios.
Expansion into Prime Brokerage Services
Kraken is also working on expanding its prime brokerage services and plans to launch a qualified custodian service for institutional clients in the near future. The custody service is currently seeking approval from the state of Wyoming.
Gaining Market Share
Despite a decline in trading volumes overall, Kraken has been gaining market share, particularly at the expense of Binance. Data from CCData shows that Kraken’s share of the global spot trading market is currently at 3.5%, its highest since 2018.
No Comments from Kraken or Regulatory Authorities
A spokesperson for Kraken declined to comment on these developments, while both the UK’s Financial Conduct Authority and FINRA have not responded to requests for comments from Bloomberg.
Hot Take: Kraken Expanding into Traditional Markets
Kraken’s move to offer trading of US-listed stocks and ETFs demonstrates its aim to expand beyond the crypto market and compete with established platforms like Robinhood. By providing a combined portfolio balance, Kraken offers convenience for users who want to diversify their investments across different asset classes. Despite the overall decline in trading volumes, Kraken has managed to gain market share, positioning itself as a strong contender in the global spot trading market. The expansion into prime brokerage services and custodian service for institutional clients further solidifies Kraken’s ambitions in the traditional financial industry.
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