Investment and trading firm E-Trade Financial Corp has announced that it is very close to adding cryptocurrency trading to its long list of abilities and services.
Volatility Hurts Crypto
For the most part, cryptocurrency trading, while popular, has been relatively slow to catch on when compared to traditional investing assets such as stocks and bonds. Crypto suffers greatly from its lack of price stability, and while it continues to be a popular tool amongst both retail players and the public, many professional and institutional players, for example, have been slow to accept it. Crypto is vulnerable to price swings and heavy volatility, and many are concerned that once they put their money into a crypto-based investment, it could disappear.
To an extent, these institutional players have a right to worry. Enthusiasts remember that in December of 2017, bitcoin traversed its way to $20,000 per coin. Many of us believed that the coin was unstoppable and would never cease gaining in price.
Unfortunately, this wasn’t meant to be. Bitcoin began falling faster than the RMS Titanic just a month later in January of 2018. Following the Coincheck hack (though it likely had very little to do with bitcoin’s overall price), the father of crypto fell to $16,000, then $12,000 and finally $11,000 in February of that year. It was a sad sight to see, but things didn’t quite stop there.
Bitcoin ultimately dropped to the $6,000 range, where it remained throughout the summer and most of 2018’s second half. By November of that year, however, things took a much nastier turn. The currency ultimately fell to the mid-$3,000 range following a bitcoin cash hard fork that took place weeks earlier. It stayed there for roughly five months before finally recovering somewhat in April 2019.
If someone had invested approximately $10,000 into bitcoin during the December 2017 spike, they would have lost roughly 80 percent of their investment by the end of the year. That means that that $10,000 would have fallen to about $2,000 or less. It’s an ugly fact to consider, and many new traders saw their profits disappear as quickly as they had been invested.
Nevertheless, it looks like cryptocurrency trading remains a popular demand amongst most standard traders, and E-Trade is assuring customers that the time will come. Fidelity Investments was one such firm to make a move like this already, and E-Trade is simply following in its path.
Will Crypto Be More Legit?
It’s possible the company realizes how much money is at stake in the crypto space, which has amassed a market cap worth several billions despite the consistent drops of the past 15 months.
The company says it will start by adding bitcoin and Ethereum trading for users to enjoy. This could potentially lead to further legitimization of the crypto industry as it meanders into standard financial firms.