In a few months, SoFi Invest users will be able to buy cryptocurrencies through a partnership with Coinbase.
Short for Social Finance, SoFi caters to young adults through a variety of financial products including lending. SoFi Invest was launched earlier this month. In addition to announcing the new partnership, SoFi announced the launch of SoFi Money today. SoFi Money will offer a 2.25% APY account, CNBC reports.
SoFi invest currently offers broker and “automatic” options. They call the broker option “active” investment. The company enables users to easily trade stocks from the comfort of their mobile device. They charge no “transaction and management fees.” There are still fees involved with trading stocks.
Rapidly expanding, the company is launching several other products this year. One of their products will feature the “auto-saving” option that is the core of the Acorns business model.
Twitter veteran (a former COO) and SoFi CEO Anthony Noto said:
Our target audience wants to see what the price of cryptocurrency is, and to buy it. They have a desire to do that and in many cases they already are.
SoFi hasn’t said what cryptocurrencies the customers will actually be able to buy through the app. Coinbase is regulated on a state-by-state basis, which is why Ripple XRP is not currently available to Coinbase Pro users in New York.
Currently worth $4.4 billion, SoFi’s CEO said the company will not be filing for an initial public offering this year.
Coinbase itself has made no official announcement about the SoFi partnership, and no representative of the firm spoke to CNBC.
With the addition of SoFi Invest, SoFi is entering the arena with Robinhood, which recently tried and failed to offer bank accounts. Robinhood very much wanted to enter the space that SoFi already operates in but failed to get the proper regulatory approval. The 3% APY checking and savings accounts offered by Robinhood saw massive public interest, but regulators expressed concerns.
Mobile users will have more ways than ever to buy and hold cryptocurrencies in 2019. The “ease of adoption” factor has diminished rapidly since the bull run of 2017. However, the actual demand for cryptocurrencies in daily life remains a key issue.
There aren’t a ton of places to spend cryptos in real life, and the prospects don’t look any better. This is due in part to the nightmare that is accepting cryptocurrencies for merchants. Simply accepting them is only the first step. A number of other issues arise, including dealing with tax accounting and successfully processing payments. FIO Protocol and others are actively working on improving this experience but may be years away from solutions that genuinely help merchants.
Nevertheless, the easier it is to buy and hold cryptocurrencies, the better the adoption rate will grow when interest returns to the crypto space.
Last modified: May 20, 2020 12:18 AM