China’s robinhood rivals pile up within the crypto craze

In this photo illustration, a Bitcoin logo is displayed on a smartphone with exchange percentages in the background.

Omar Marques | SOPA Pictures | LightRocket | Getty Images

BEIJING – Two of China’s rivals to stock trading app Robinhood are looking for cryptocurrencies to compete overseas.

Futu and Tiger Brokers announced during the conference call last month that they are applying for licenses in Singapore and the United States that would allow local customers to trade digital currencies.

The move comes as cryptocurrencies like Bitcoin have come back into the spotlight in recent months as Chinese regulators stepped up efforts to limit speculation in the market. In recent weeks, authorities have issued new warnings against trading digital currencies and cracking down on Bitcoin mining – an energy-intensive computing process that participants can use to earn Bitcoin.

But in the financial trading world, demand for cryptocurrencies is high as the price of Bitcoin rose to a record high of over $ 60,000 before falling sharply to around $ 35,000.

Robinhood, which started trading Bitcoin and Ethereum in the US in early 2018, has won 3 million customers per month for its crypto business this year. In April, the US-based cryptocurrency trading site Coinbase made its debut on the Nasdaq.

“We hear great interest in crypto from our users around the world. We listened to that, ”Arthur Chen, Futu’s chief financial officer, told CNBC last week. He said the company hoped to launch cryptocurrency-related products as early as the end of this year.

Both Futu and Tiger Brokers started mostly with Chinese employees from large tech companies like Alibaba and Baidu. Since these companies are listed in the US, it piqued their employees’ interest in trading stocks overseas.

However, both companies are increasingly focusing on markets outside of mainland China. Beijing not only prohibits yuan-bitcoin transactions, it also strictly controls capital flows from the mainland.

Futu gained 100,000 paying customers in Singapore less than three months after launching in early March, Chen said. He said about a quarter of new paying customers in the first quarter were from Singapore and the United States

In the international retail market, the two companies face competition not only from Robinhood, but also from traditional players like Interactive Brokers. Both Futu and Tiger are trying to attract customers with an in-app social network where users can share trading ideas and view investor training courses.

At the end of March, Futu said it had 789,652 customers with assets in their trading accounts, more than three times what it was a year ago.

Tiger said the number of customers with deposits more than doubled to 376,000 in the first quarter from a year earlier.

Cool interest in IPOs

Customers are very interested in cryptocurrencies and Coinbase’s listing has attracted new users, Tiger Brokers CEO Tianhua Wu told CNBC last week.

However, the general interest of users in IPOs has cooled compared to the previous year. While the exuberance of IPOs could have resulted in $ 1 billion or more worth of orders related to a listing, the deals are now attracting far fewer orders, Wu said.

Last week, both Futu and Tiger Brokers entered the MSCI stock indices, which are represented by trillions of global investment dollars.

Read more about cryptocurrencies from CNBC Pro

– CNBC’s Kate Rooney contributed to this report.

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