A social trading platform is dropping equities for cryptocurrencies. The network, investFeed, announced on Thursday that it has decided to stop allowing investors to trade equities on its platform.
Instead, the over 15,000 current users on the platform will use the platform to trade in decentralized digital assets.
Ron Chernesky, CEO of investFeed, is a former trader who launched the platform with CTO Andrew Freedman in early 2015.
The platform is the result of Chernesky and Freedman’s goal to “build a transparent type of Twitter for the financial markets,” where users create profiles they can integrate with their existing brokerage account. Users can share their trade with peers “and create a fully open and transparent environment for the equities industry on the social level.”
As the market for cryptocurrencies has grown, though, Chernesky said, users started asking for them to be added to the investFeed platform. The cryptocurrency market hit over $100 billion in June, according to Autonomous Research, but CoinDesk reported on Sunday that the market fell almost 50% to $61 billion.
“Over the last few months, the uprise in this has just created that much more demand on our platform,” he said.
“Once we had a change to get an understanding of the underlying technology … and figured out what technology stack we wanted to use, we realized the advantages that this technology has over what we had been using,” Chernesky said.
When he saw banks and other financial institutions looking into cryptocurrency, he added, “We knew it was the right time to jump on the ship and bring this to market.”
The platform is using a token generation event (TGE) to fund the switch. Participants can purchase FEED tokens which will be issued within 90 days of meeting its maximum of 28,000 ether tokens.
Chernesky and his team decided to drop equities from the platform altogether because the audience of investors interested in each are so different, and because the “underlying technology as far as the FEED token that we’ve created and how it’s going to be utilized on the investFeed platform, you would basically have to have a cryptocurrency wallet to be able to” trade on the platform.
Chernesky said his team is reaching out to current users now to begin educating them on “how cryptocurrencies work and how they operate, and the underlying technologies that power them. It’s a different type of research than the fundamental research you would do with stocks.”
He acknowledged that some users will leave the platform, but he believes cryptocurrency is more than just a fad.
“The Fidelities of the world, they’re now creating their own divisions and they’re building out blockchain. The investment banks, they’re adopting the technology as well,” he said. “It’s not just in the U.S. It’s moving through other countries rapidly.”
--- Read Turning Cryptocurrency Into an Asset Class on ThinkAdvisor.