On Oct. 29, 2020, crypto derivatives exchange FTX unveiled the trading of about a dozen equity and crypto pairs for top stocks such as Apple, Tesla and Amazon.
FTX has dubbed the new fractional stocks offering a “first of its kind”. The trading service will be available in collaboration with Digital Assets AG and CM-Equity AG.
According to Sam Bankman-Fried, CEO of FTX, the tokens that represent a specific stock will function much like a depositary receipt or ETF (exchange-traded fund), which will be listed on the exchange. Giving an example of tokenized Tesla stocks, Bankman-Fried explained:
“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.”
Users of the Hong-Kong based exchange can now start trading high demand stocks like Facebook, Netflix, and Google, represented by tokens, against BTC, stablecoins, and some altcoins.
However, traders in the US and all other FTX restricted jurisdictions won’t have access to these fractional stock products.
Digitized Assets Represent the Future
According to the FTX CEO, crypto and equities trading is becoming more popular among investors who want opportunities that match their interests.
This trend points to a future dominated by digitized assets that offer traders the unlimited potential to express their beliefs about various markets. FTX now joins a host of other crypto-focused firms that offer stock trading support to investors.
For instance, leading digital money platform Uphold, launched a service in June 2020 that allows individuals across Latin America to invest in popular stocks such as Google and Amazon.
Users of the Uphold platform can purchase fractional shares of expensive US stocks for as little as $1, thus democratizing access to the world’s top equities market. California-based broker firm Robinhood also allows traders to purchase slices of stocks.
Another top firm that offers stock trading support is Cash App, the app for US-based payments company Square.inc.
FTX Expands its Crypto Trading Offerings
On Oct. 26, 2020, FTX partnered with Hxro to launch yet another product tailored for retail cryptocurrency traders.
Dubbed TixWix, the new service offers users a simplified product that should attract more traders to participate in the options markets.
The TixWix product leverages FTX’s back end to support a simplified options trading interface that distils complex market data to make trading options a simpler ordeal.
FTX also recently launched a crude oil futures product and plans to soon launch tokens based on oil futures, according to Bankman-Fried
