Cryptocurrencies have seen big declines over the past 12 months, but that hasn't decreased Main Street investors' interest in getting exposure to the volatile market, according to one big fintech.
Lending startup SoFi announced plans on Tuesday to offer cryptocurrency trading to its customers in the second quarter of this year through its recently launched trading platform, SoFi Invest. Despite the bearish market crypto has endured over the past year, Anthony Noto, SoFi's CEO, said there is client demand for access to the nascent market.
"Our target audience has a desire to be able to see what the price of cryptocurrency is and be able to buy cryptocurrency," said Noto at a media roundtable Tuesday morning. "We put the member at the center of what we are doing and what they want to do to achieve their financial independence. That is why we are doing it. It is 100% because we know that it is something they want to do. And they are already doing, quite frankly."
Noto declined to specify what currencies would be initially offered, and didn't elaborate on additional details. Noto has said in the past that SoFi was working with Coinbase to help facilitate trading.
Coinbase did not return a request for comment in time for publication.
SoFi may work with custody and clearing firm Apex Clearing on its new crypto endeavor. The company made a minority investment in Apex, Business Insider previously reported.
SoFi's plans to offer cryptocurrency trading highlight the $4 billion fintech's hopes of moving beyond its lending roots. On Tuesday, the company also announced the launch of SoFi Money, a savings platform that currently offers 2.25% interest and has no account fees, and its robo advisor SoFi Invest, to the general public.
SoFi is the latest in a long line of fintechs looking to become the financial hub for its clients. Over the past year, Robinhood, Betterment, Acorns, and M1 are among the fintechs that have unveiled plans to grow beyond serving as just a robo advisor. The process hasn't always been smooth. Robinhood faced backlash when it was revealed its cash management offering would not be insured. SoFi money is insured by the FDIC up to $1.5 million.
"I think Invest and Money will both uniquely bring in new members that we wouldn’t have brought in through the lending products," Noto said. "Within Invest, it is hard to know whether it is going to be stocks, ETFs, robo or cryptocurrency. We know our members, and non-members that fit our targets, want elements from an investment standpoint. I think Invest overall will bring in new members, and then what they buy once they are there, we will have to observe."
Noto said SoFi's financial plan for the year ahead includes meaningful headcount growth. Product engineering and design is the top priority, he added, with roughly 75% of new hires coming in that space in 2019. SoFi currently has 1,400 employees across seven offices in the US.
With SoFi joining a host of other fintechs with investing offerings, it'd be fair to expect some consolidation. However, Noto said SoFi has no immediate acquisition plans, nor does he expect others to make significant moves in the near term.
"I think the industry is still in formation phase," Noto said. "I'd be surprised if there are a lot of transactions. ... I don't think there will be a lot of M&A. I think people are in formation phase and are well capitalized and the environment is still healthy for them to continue to have ample capital to run their businesses behind aggressive growth plans."
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