Why Zerodha’s Nitin Kamath Fears Crypto Might Disrupt Online Stock Brokers

In a series of tweets, billionaire Kamath explained why he fears this, especially for new age online brokers or even exchanges. He said that in broking or exchange trading, both on price and product, there is not much left to disrupt. “Of course, someone suggests a way to give money to people for trading (-they are not allowed by brokerage regulation) or a way to help all clients make money,” he said.

Brokers and exchanges depend on a small group of active traders, around 1 million traders, for revenue. If they start trading anything else, it will disrupt everything, he said, adding that active traders also provide liquidity, reduce impact costs and risk, and help with better price discovery.

Elaborating further, he added that traders want high leverage, volatility and the markets remain open for a long time. The crypto kind scores on these stocks. “Of course, trading crypto is very risky and there is no fundamental information for price movements. But greed usually takes over most people over time.”

Kamath also pointed out that crypto has recently disrupted brokers and exchanges in the US. Coinbase’s AUM is $180 billion, and Robinhood Crypto’s crypto AUM is approximately $11.5 billion, he said. “Many office bearers could not react quickly, fearing the regulator to backtrack and most missed the bus,” he said.

However, Kamath said, “Although crypto in India is still small, we are in the same situation as the US a few years ago. Regulatory fears do not allow regulated platforms to offer crypto. Eventually, if the status quo on regulations continues.” If so, traders can walk away and disrupt the broking industry.”

According to IIFL Wealth and Hurun India’s 40 and Under Self-Made Rich List 2020, Nitin Kamath and Nikhil Kamath are the richest self-made billionaires under 40 in India. Nitin and Nikhil Kamath are the richest entrepreneurs under 40 in India. Property ₹24,000 crores.

Meanwhile, within 15 months of commencing operations in India, CoinSwitch Kuber has claimed to become the largest cryptocurrency exchange in the country in terms of the total number of registered users on the platform. It hit the 10 million registered users mark this week.

“In just 15 months since commencing operations in India in June 2020, CoinSwitch has reached the Kuber milestone, which is a testament to its simplicity and convenience,” the company said in its official statement.

According to the company, out of the total 10 million users, 7 million are active users on the platform with a monthly transaction volume of Rs 15,138 crore.

The platform is seeing maximum participation from the millennial and GenZ population. About 75% of its total users are between 18 and 35, while the average age is 24. It claims to attract investors from over 4,000 cities across the country, with around 55% of its users belonging to Tier 2 and 3 cities.