Joe Jowett: Retail Investment Platforms Are Broken – Here’s How To Fix Them

A new generation of investors is disrupting the market. With around fifteen percent of all current retail investors starting in 2020, the global pandemic caused many people to consider investing to boost their incomes. The trend continued into 2021, with global e-trading reaching over $8bn in volume this year. Alongside this meteoric rise, a variety of online trading platforms have emerged, each offering a purportedly accessible service to introduce new customers to the world of trading.

But many failed to deliver what they promised and at StrikeX, we recognised that technology can provide a solution to fixing the outdated, overly centralised brokerage platforms and transform trading into a truly open and accessible market.

Traders are getting younger

As trading communities started to grow on platforms such as reddit and YouTube, more and more young people started flooding onto burgeoning platforms like Robinhood and Trading 212. Studies show that the median age of retail investors shifted from 48 to 35 after 2020, and over 50% of what has been termed “Generation Investor” are millennials.

This new generation of investors saw the potential benefits of wider participation in the stock market and the demystification of trading from the safeguarded world of insiders and gatekeepers to a transparent and accessible mechanism open to all. This sentiment reached a boiling point in January 2021 amid the Gamestop saga, when retail investors gathered on online forums to “short squeeze” the institutional investors who had bet against the struggling videogame retailer.

As some of the biggest exchange platforms suspended trading, unable to deal with the volume of transactions, millions of people lost money, shattering the illusion of a fair and open marketplace for all. Since then, many investors have moved to alternative assets like crypto and NFTs, where the underlying blockchain technology enables frictionless peer-to-peer trading without the need for intermediaries.

The tokenisation revolution

Blockchain technology is seeing an accelerated adoption across a variety of sectors, from visual art and the metaverse to real estate and supply chain management. Another transformative use case is the tokenisation of assets. As NFTs have demonstrated, anything can be tokenised to establish an immutable record of ownership on the blockchain. Tokenising shares in stocks and bonds, as well as commodities and real estate can revolutionise the way we trade from the ground up.

First of all, it allows for 24/7 trading, irrespective of stock exchange cycles, as transactions can be recorded on the blockchain even when markets are closed. This also helps transcend geographical boundaries, making markets accessible to people at any time and any place. The underlying automation of the blockchain also allows for maximal transaction speeds with minimal transaction fees. Finally, it guarantees transparency and decentralisation, as information on the blockchain is accessible and verifiable by all, taking data ownership out of centralised control.

Further, tokenisation allows for all assets, from stocks to crypto, to be traded on one single platform. This opens up the entire market to a wide range of investors who might otherwise be hampered by having to keep track of multiple portfolios on several platforms. These assets can be fractionalised, allowing investors to purchase partial shares, making diversification possible at lower costs and opening up a wide range of assets to potential investors.

A platform ready for the future 

TradeStrike, our flagship product due to launch in late 2022, delivers the combined benefits of tokenised trading. This way, our exchange platform can future-proof online retail investing and fix the issues which most exchanges encounter today. Our product will offer tokenised assets, including stocks, NFTs and real estate, as well as cryptocurrencies, all in one unified interface.

This streamlined system will allow traders and investors to access assets that would otherwise be out of their reach and enable users to build diverse portfolios for both short and long-term investment strategies. 24/7 trading, as well as cross-border transactions will further open the market to a wide investor base and allow access to assets that had previously been restricted to traders due to their geographical location.

While many of today’s trading platforms can seem cluttered and confusing to new beginners, TradeStrike’s user interface will be intuitive and clean, breaking down some of the barriers which can prevent new users from making the right decisions. Educating traders about the risks and rewards of investing is important to us, so our platform will come with a library of informative learning materials to equip beginners with the right tools for their investment journey. This is a part of our mission to empower traders and give them the confidence to operate safely on a transparent marketplace.

While the outdated, traditional trading infrastructure struggles to cope with the sizeable influx of new investors, future solutions like TradeStrike are fair, secure and designed with the user in mind. The appetite is clearly there, now it is time to furnish Generation Investor with the tools they deserve.

Written by Joe Jowett, CEO of StrikeX