According to CNBC, Softbank startup, Drivewealth will begin to offer retail crypto trading to become a crypto liquidity provider. This, according to reports put the firm in a position to compete with Coinbase. In consequence of this retail crypto trading, the partners of Drivewealth become eligible to trade crypto on their platforms with their retail clients.
DriveWealth is, however, a company situated in New Jersey and supported by a Japanese heavyweight Softbank. Founded in 2012 by Cortright, the firm remained on the radar of the retail crypto explosion. According to reports, DriveWealth rose from a $200 million valuation in 2020 to $2.85 billion in 2021. The firm remained backed by investors including SoftBank’s Vision Fund, Point72 Ventures and Insight Partners. As things stand, the valuation of the firm remains at $2.85 billion. The firm announced its retail crypto trading by instigating two subsidiaries programmed to provide its retail investors with crypto trading.
According to the CEO of Drivewealth, Bob Cortright, the need to proceed into the crypto community became imperative, following the realities that crypto traders are compelled to trade on an unsustainable transaction enveloped on coinbase. Furthermore, he remarked that crypto traders cannot continue to get charged on 200 basic points, per transaction on coinbase. The CEO noted that such remains unacceptable in an environment locked across digital currency, where traders lookout for efficiency and spreads.
As at now, the Coinbase remains the biggest crypto exchange, situated in the United States. The firm tasks as huge as 4.5% on the value attached to each transaction, including a spread fee. According to a financial report by the firm, the crypto exchange, recently raked 88% of its $1.2 billion total income from transaction fees in Q3.
How Retail Crypto Trading Manifested in DrivesWealth
However the manifestation of the retail crypto trading services by Driveswealth became obtainable with the recent acquisition of crypto-systems. In view of this obtainment, the firm resolves to begin bitcoin and ethereum trading to its partner through its DriveLiquidity subsidiary in April. This subsidiary, however provides liquidity for all the partners, intending to invest and participate in the trading of crypto assets.
In addition, the firm also instigated DriveDigital as another crypto exchange subsidiary exchange. The essence of this mechanism is to offer application programming interface access to its partners. With this, investors in retail crypto trading becomes eligible to even trade on Bitcoin (BTC) and Ethereum (ETH)
The CEO further that the increase in the demand for liquidity by companies, spread across various endeavors facilitated the development. According to Corthright, these companies make the demand to allow their subscribers trade or rake crypto oriented rewards.
However DriveWealth has a hard nut to crack, if its major focus remains jostling the crypto environment with coinbase. As of Q3 2021, coinbase enjoys over 68 million subscribers. The leading crypto exchange also secured a $39 billion market cap, with an investment record of about $36.5 billion valuation.