HOOD Stock Drops Nearly 6%, Robinhood Faces Competition from Crypto Exchanges
Robinhood Markets Inc (NASDAQ: HOOD) stock closed Thursday, January 13, 2022, exchanging hands at $15.30 per share, down 5.85% from the day’s opening price. The commission-free stock trading pioneer faces unprecedented competition from crypto exchanges seeking stock trading licenses.
According to media outlet Bloomberg, FTX.US and Bitstamp USA are en route to extending stock trading to their customers. Thereby posing a direct threat to Robinhood’s future growth prospects.
Through a tweet, Brett Harrison President FTX US said that working hard to provide stock trading features to its customers. “We’re hard at work on stocks! Features we’re planning for day 1: -Live BBO and historical candles, Stock screening/search functionality, Basic fundamentals (market cap, P/E ratio, dividend yield), Portfolio performance tracking, order/trade details,” the tweet indicates.
Harrison further clarified that the company will be offering actual stocks and not tokenized or synthetic stocks. Although the actual date is not confirmed, Harrison noted that it is ‘probably a couple of months.
As for Bitstamp USA, Chief Executive Officer Robert Zagotta said in a recent interview that the firm is eyeing the stock market, non-fungible tokens (NFTs), and crypto derivatives.
Notably, crypto exchanges are moving away from stock tokenization following the huge regulatory screening. The Binance crypto exchange announced the launch of tokenized stocks last year but has since been met with stringent regulations.
Coinbase global on the other hand has not declined nor indicated plans to offer stocks to its customers.
A move by crypto exchanges into the traditional stock market indicates the stress recorded in the crypto industry in the past few months. With global regulators on top of the crypto industry, digital assets exchanges are devising new ways to make a profit. Moreover, the crypto market has seen a huge decline in value over the past few weeks, following a huge resistance from last year’s Bitcoin ATH.
Robinhood (HOOD) Stock
Robinhood stock has been on a bear market since the company went public in 2021. According to market analytics provided by MarketWatch, Robinhood stock has dropped approximately 62.62%, and 13% in the past three months and YTD respectively through Thursday.
As blockchain technology revolutionizes the forex trading market, big players are expected to reorganize to stay relevant in the next decade. Robinhood significantly damaged its reputation earlier last year when it stopped trading for some popular stocks leading to uproar from retail traders and US regulators.
On the other hand, most crypto exchanges have gained notable trust from both institutional and retail traders in the past decade. Consequently, their venture into the stock market puts Robinhood in a tricky position surrounded by stiff competition.