Which Brokers And Exchanges Are Going All-In On Crypto, And Which One is Staying On The Sidelines?

Zinger Key Points
  • Robinhood said 2 million users on the waitlist for its Wenwallets digital wallet can now transfer cryptocurrencies.
  • Charles Schwab is taking the most hands-off approach to crypto up to this point.

Bitcoin BTC/USD and other cryptocurrency prices have been under pressure in the past year as investors have rotated out of risk assets amid concerns about a potential economic slowdown and global geopolitical instability. Last week, Bank of America analyst Craig Siegenthaler attended the Bitcoin 2022 conference in Miami, which included more than 3,000 companies and 35,000 attendees.

After attending presentations by a number of different brokers, asset managers and exchanges, Siegenthaler recently summarized the main takeaways from the conference for each company.

Related Link: If You Invested $1,000 In Bitcoin At Its COVID-19 Pandemic Low, Here's How Much You'd Have Now

Conference Breakdown: Robinhood Markets Inc HOOD said 2 million users on the waitlist for its Wenwallets digital wallet can now send and receive cryptocurrencies. Siegenthaler said Robinhood plans to launch a non-U.S. offering later in 2022, but he is unsure how the platform will function given payment for order flow is banned in other developed markets.

Siegenthaler said Interactive Brokers Group, Inc. IBKR had an early mover advantage in the cryptocurrency market when it launched cryptocurrency trading in the third quarter of 2021. However, he said less than 30,000 of Interactive Brokers' clients are trading crypto on its platforms, a disappointing percentage of its overall customer base.

Intercontinental Exchange Inc ICE trades physically-settled Bitcoin futures contracts, but Siegenthaler said the company's most notable crypto-related activity has been its strategic investments in Coinbase Global Inc COIN, Bakkt and tZero.

CME Group Inc CME is a market leader in crypto derivative trading, and Siegenthaler said CME's products have been heavily adopted by crypto ETFs and retail investors.

Nasdaq Inc NDAQ isn't directly involved in the crypto space in a meaningful way, but Siegenthaler said the company's Market Infrastructure Tech provides software that underlies several cryptocurrency exchanges.

Finally, Siegenthaler said Charles Schwab Corporation SCHW is taking the most hands-off approach to crypto up to this point. Schwab doesn't currently offer any cryptocurrency trading capabilities or products. Siegenthaler said its hesitancy may be tied to its oversight from the Federal Reserve, which has a higher standard of protection for investors than many smaller brokers.

Benzinga's Take: Many of these brokers and exchanges have exposure to Bitcoin and other cryptos, but none more so than Coinbase and Robinhood. Among the stocks mentioned, Bank of America currently has Buy ratings for Coinbase, Charles Schwab, Interactive Brokers and Nasdaq.

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