Apart from its role in revolutionizing communication, the internet was the driving force in bringing investing online, breaking down informational and execution barriers for a large class of retail traders. The subsequent spread of trading applications brought immense functionality to a wider range of investors, namely the ability to participate in financial markets with greater execution speed and reduced fees.
Since then, platforms like eTrade and Interactive Brokers have popularized trading even further, making a wide range of asset classes, tools, and education accessible to vast numbers of retail traders. Even better, these platforms centralize many functions and provide liquidity from multiple exchanges and ECNs, adding to the advantages of online investing.
Crypto Asset Management
The next phase of evolution is already meeting significant milestones after UK-based robo-advisor and online wealth manager Nutmeg surpassed GBP 1 billion in funds under management last year. However, this degree of centralized execution and advice is less the case for crypto trading, which faces multiple challenges that make it unappealing to less-knowledgeable investors.
With a clear need present, crypto asset management tools are quickly emerging to assist retail investors with their exploration of the market. For the companies behind these platforms, the incentive is clear: the market capitalization of cryptocurrencies is nearly $400 billion, and it’s starting to show signs of stabilizing.
A more mature market also means that less knowledgeable investors are likely to dip their toes in, requiring in tandem a platform that delivers easier access compared to the fragmentation that currently defines the trading ecosystem.