SoFi is now moving into the cryptocurrency sector. According to a recent announcement it will be partnering with the exchange giant Coinbase (NASDAQ: COIN). SoFi users will be able to benefit from the opportunity to purchase and sell crypto in the second quarter of the year.
According to SoFi CEO Anthony Noto, research of the company’s target audience revealed that these want to buy cryptocurrency. He added that this is already happening with users looking to other avenues to make their purchases. The former Goldman Sachs managing director joined Sofi last January and looks to have ambitious plans for the finance start-up.
So far, it has not been revealed which cryptocurrency will be available on SoFi but an announcement is expected on this very soon. There’s a similar arrangement between Fidelity and Coinbase where portfolio owners can view digital currencies and asset balances but they cannot trade in the coins. Coinbase which was valued at a staggering $8 billion after its recent funding round will now offer this option for SoFi users.
Cryptocurrency trading will be available under the umbrella of SoFi Invest, which went live earlier this month. SoFi Money, another new arm of the company, will offer a 2.25 percent APY cash account with no fees. It will be joining a list of peers who are competing assiduously for customer deposits in this area.
The start-up also filed for two index exchange traded funds which will waive management fees for the first year, encroaching on a market dominated by Vanguard and BlackRock’s iShares. Through SoFi Invest, the firm will also offer “active” investing with the help of a broker and automated, or “robo” advising.
SoFi, short for social finance, was founded in 2011 with a focus on millennial student-loan refinancing. It has since expanded offerings to the demographic with personal and mortgage loans. The company was last valued at $4.4 billion and has raised $1.9 billion to date from names like SoftBank Capital and Peter Thiel, according to data from PitchBook.
SoFi’s move into cryptocurrency comes as the price of Bitcoin Core (BTC) and other digital assets have come crashing down. BTC has lost more than 80 percent of its value since shooting up to almost $20,000 at the end of 2017. Still, Noto said SoFi customers are interested and could see the volatility as “two-sided coin.”
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