2022 in Review: Multi-Asset Brokers Turn to Crypto as Competition Aggravates

Throughout 2022, the world has been grappling with financial and geopolitical uncertainty. Increased market volatility can lead to big price swings, in which, in not a few traders' eyes, exists potentially high returns.

The market competition among multi-asset brokerage firms nowadays is intensifying. To seduce more prospects and retain customers, a host of companies are offering access to more diversified investment products, in addition to dropping trading commission and spreads​.

Fazzaco has sorted out 28 financial companies, including eToro​, Swissquote, ThinkMarkets​, ACY Securities, BDSwiss​, Tickmill, VT Markets, and Alpari​, introducing more instruments (7 types of assets involved, including cryptocurrencies, stocks, ETFs, Forex, commodities, bonds, and futures) to expand their trading lineups this year to meet their clients' growing demand, with several scaling up more than one type of assets. See the chart below:

eToro, the Israeli multi-asset investment company, was the only one among the 28 brokerages that has added 4 types of trading tools, including cryptocurrencies, ETFs, stocks and commodities.

3.6% of these firms have added three types to their trading assets, with the number of 2; 7.1% added two types, and 67.9% added one type, with the number coming in at 6 and 19, respectively.

Cryptocurrencies lead the list.

Additionally, among the seven types of trading assets, cryptocurrencies are the most favored by these brokers, with more than half (15 firms) of them introducing the asset, followed by stocks products with the companies totaling 13. ETFs rank the third most favored asset.

What these multi-asset brokers offered indicated customer demand. Apparently, the crypto downturn throughout 2022 is yet to cool off the crypto frenzy.

Cryptocurrencies are the future of finance.

Regarding the value behind cryptocurrencies, many people believe that, compared to traditional assets, the asset will grant more equal access to financial systems, helping drive financial inclusion. During the US 2022 midterm elections, in a survey conducted by Grayscale in partnership with The Harris Poll, around half of Americans (53%) agreed that "cryptocurrencies are the future of finance," including 59% of Democrats and 51% of Republicans. 

Statistics from Grand View Research showed that the global crypto market size was valued at USD 4.25 billion in 2021, and is expected to grow at a compound annual growth rate (CAGR) of 12.2% from 2022 to 2030.

TripleA​, a licensed crypto payment gateway, predicted that as of 2022, global crypto ownership rates would reach an average of 4.2%, with over 320 million crypto users worldwide, while this figure was 295 million in December 2021.

Crypto world welcomes more players.

Hence, to cater to this growing demand, a batch of brokerages have expanded their crypto offerings in 2022, even some started to foray into this field.

At the beginning of the year, Dutch online brokerage BUX has enabled crypto investment for the clients of its flagship commission-free platform, BUX Zero. Besides, StoneX​, Orbex, XP Inc.​, and OANDA have introduced crypto trading services successively.

Cryptocurrencies become a powerful tool helping brokerages to push the boundaries. 

Currently, it's fair to say the whole digital world is going though "the weeding out" stage, during which the transformation can be remarkable as well as tortuous.

"Bitcoin and cryptocurrencies offer innovative solutions that may prove to become a new way of hedging against a global economic crisis as well as disrupting old economic models that no longer serve the modern investor," BUX​ CEO, Yorick Naeff said in a statement.

Take StoneX​ for instance, following the expansion into crypto space in May, the broker has experienced the biggest increase in net income during Q4 FY22 ended September 30, 2022 since 2020, with the figure surging 616% on a yearly basis.

Looking ahead, we can expect that the storm in the crypto market will gradually wind down, and that an increasing number of multi-asset brokerages will extend their footprints up ahead in the upcoming year, which might help them win a strong competitive edge to onboard new customers.