Interactive Brokers CEO Thomas Peterffy started his firm in 1977 and while he is happy to see more competition in the marketplace, he’s not worried about Robinhood as a direct rival.
“The Interactive Brokers customer tends to be a do-it-yourself, sophisticated person with a financial background and the average Robinhood customer is a young person,” he explained to FOX Business.
The average age of an IB customer is around 42 years old, compared to 31 for Robinhood. And with age and experience comes a bigger account balance that averages over $257,000 at IB, compared to $4,500-plus at Robinhood.
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Even so, Interactive Brokers, among the leading online brokers as measured by daily average revenue trades, is ramping up their offerings for customers, with plans to roll out a cryptocurrency option very soon.
“You will be able to trade digital coins at Interactive Brokers before the summer is over,” he revealed. It is unclear when the rollout date will be.
The offering comes as demand for cryptocurrencies explodes. Bitcoin’s market cap has soared to $746 billion as the largest crypto asset to date. Robinhood has been cashing in on crypto trading already, noting that it had “over 9.5 million customers trade approximately $88 billion of cryptocurrencies” in the first quarter of 2021, as listed in its IPO SEC filing.
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Robinhood’s initial public offering made its debut on Thursday, falling below its $38 per share offering price after the company raised over $2 billion in its offering. The broker is valued at around $32 billion.
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It joins IB, Charles Schwab, and its Ameritrade arm, as well as Morgan Stanley’s E*Trade in the publically traded brokerage space, all potentially competing for institutional shareholder dollars.
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Still, Peterffy credits the young firm with enticing a new crop of investors which, in his view, benefits the entire industry.
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“I have to give credit to Robinhood for including over 22.5 million young people into this business, it’s a fantastic achievement,” he noted.
View more information: https://www.foxbusiness.com/markets/interactive-broker-ceo-welcomes-robinhood-to-big-leagues