Firms like Robinhood, Block, and eToro already offer crypto alongside their stock offerings, so it’s only a matter of time before crypto brokerages start offering stocks. That is the view of Jesse Powell, CEO of early Bitcoin exchange Kraken and a well-respected veteran of the cryptocurrency space.
In the last episode of DecryptPowell noted that cryptocurrency exchanges are moving toward offering a “super-portfolio” of sorts that allow consumers to buy or trade everything from cryptocurrency to NFT to stocks.
“I think you will see all these types of cryptocurrency exchanges converging with a very similar feature set that becomes a kind of super wallet and a comprehensive product application with NFTs, spot trading, forex and maybe even stock trading, maybe even more extreme crypto stuff,” Powell said. “I think we said that before [stocks] It’s something we’re exploring that I think makes sense to do.”
It’s worth noting Powell’s perspective because he’s been involved in cryptocurrency almost from the start, setting up Kraken as a Bitcoin exchange in 2011 after running a previous company that facilitated trading in World of Warcraft gold and other digital items.
Kraken is less well known than its bigger competitor Coinbase, but the company has long been doing well in the US and other large markets, and is a trading platform for many professional cryptocurrency traders. More recently, it has focused on trying to attract more retail investors, “in an effort to engage the next billion users in crypto,” Powell said.
Even as more and more companies offer cryptocurrency, Powell says he is not worried that this will put too much pressure on trading fees, which are by far the biggest source of revenue for Kraken and other exchanges.
“I don’t really think there’s much pressure on the trading fees. I still feel it’s pretty low.” He said. “I think it could go to zero. But I don’t feel like, when the price of something moves 20 percent every day, I don’t think people are checking an eye at 20 basis points.”
He added that many investors are “relatively insensitive” to fees and that, “in the end, it’s going to get the best user experience and you’ll be able to do more of what you want in one place.”
Meanwhile, Powell says that Kraken is already working on diversifying its revenue streams into cryptocurrency. He noted the company’s upcoming NFT offering and DeFi staking, which he says has become part of the company’s business.
Personally polite and well-spoken, Powell is known for his feisty attitudes towards regulators, having pulled the famous Kraken out of New York in 2015 in response to that state’s controversial regulatory framework known as BitLicense. In 2018, he describe it New York as an “abusive and controlling ex-girlfriend that you broke up with 3 years ago but they keep stalking you.”
Kraken’s view of the New York crypto decree – launched by the regulator who left shortly after to advise crypto companies on how to navigate the same license he created – has not ameliorated recently.
“After all this time, I mean, if we just look back and study the economic damage done by BitLicense, I’m sure it will be massive — in the billions of dollars,” he said. “But other countries are becoming more open and welcoming of bitcoin, and are even looking at it as something that can create growth in their economy, something they want to attract to their country.”
The CEO of Kraken also shared his candid view on a wide range of other crypto topics, including the upcoming Ethereum integration and the role of NFTs in gaming. He also made a salty bid for San Francisco, where Kraken recently closed its office due to rampant crime, and a prescient warning about stablecoin issuer Terra – which collapsed spectacularly this week. Listen to the full episode wherever you get your podcast.
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