Today, popular crypto derivatives exchange FTX launches trading of more than a dozen equity and crypto pairs, featuring top stocks such as Apple, Tesla, Amazon, Facebook, Netflix, and Google. (Updated at 09:49 UTC: updates in bold.)
The new “fractional stocks offering” is brought in partnership with Digital Assets AG and CM-Equity AG, the exchange said in a press release. However, traders in the United States and all of FTX’s other restricted jurisdictions will not be allowed to access these equities.
“Both crypto trading and equities trading have been steadily attracting a wider audience with new market participants coming in,” Sam Bankman-Fried, CEO of FTX, was quoted as saying.
According to him, these fractional stock products reflect “the reality that today’s traders are industry and sector spanning and want trading opportunities that fully match their interests and mindset.”
The tokens will behave much like a depositary receipt or ETF (exchange-traded fund), Bankman-Fried told Bloomberg.
“FTX itself lists tokens on the equities. For instance, ftx.com/trade/TSLA/USD is a market to trade tokens on Tesla stock. These tokens are backed by shares of Tesla stock custodied by CM-Equity. They can be redeemed with CM-Equity for the underlying shares if desired. In the future, there may be other ways to withdraw the tokens from FTX,” the company explained in their FAQ.
Here’s the whole list of equities offered by FTX:
- Beyond Meat
- SPDR S&P 500
- SPDR Gold Shares
- iShares Silver Trust
- The United States Oil Fund
- iShares China Large-Cap ETF
- iShares MSCI EAFE ETF
- iShares MSCI Emerging Index Fund
They’ll be traded against bitcoin (BTC), stablecoins, and some of the altcoins.
FTX has therefore joined other crypto-related companies already offering similar services. Digital money platform Uphold said it enabled people across Latin America to invest as little as USD 1 in major companies such as Google, Facebook and Amazon. Furthermore, crypto investing app Abra too announced the option for its users to buy stocks in these and other major companies; California-based broker Robinhood, which has been often discussed lately, offers the purchase of slices of stocks; and Cash App, the payments app from US-based payments company Square, founded and led by well-known Bitcoin bull, Twitter CEO Jack Dorsey, announced stock trading support a year ago as well.
Meanwhile, 2019 was apparently quite a year for this option, as the brokerage giant Charles Schwab also revealed its plans to enable traders to buy fractional shares of stocks, and investment banking giant JPMorgan Chase launched an option for clients with less than USD 5,000 in ETFs and cash balances to trade whole and fractional shares.