Introduction
Crypto.com is one of the most popular cryptocurrency exchanges by US dollar volume traded, and now also offers a gateway to traditional stock markets for US users through Foris Capital US LLC, its fully registered broker-dealer. This platform enables users to trade stocks and exchange-traded funds (ETFs) on Crypto.com.
In this article, we guide users through the process of trading stocks on Crypto.com, highlighting its features, advantages, and what sets it apart from traditional brokerage platforms. Let’s start by exploring what stocks are, and some of the advantages of trading stocks through Crypto.com’s broker-dealer.
What Are Stocks?
When companies want to raise money to grow their business, one way is equity financing, which is through making the company ‘public’. This involves dividing the company’s partial ownership into a number of pieces, called stocks or shares, that represent a fraction of the company’s assets and earnings. These shares are then registered with the US Securities and Exchange Commission (SEC) as securities and sold to investors through stock exchanges like the New York Stock Exchange (NYSE) or Nasdaq.
When someone buys a stock, they’re usually purchasing partial ownership in that company. This ownership normally comes with certain rights, such as voting on important company decisions and receiving a portion of profits, called dividends, if the company chooses to distribute them.
Stock prices fluctuate based on various factors, including company performance, industry trends, economic conditions, and market sentiment. For example, if a company reports strong earnings or launches a successful product, its stock price typically rises. Conversely, negative news can cause the price to fall.
Normally, investors make money through stocks in two ways: capital appreciation (when they sell shares at a higher price than they paid) and dividend payments if a company decides to distribute them. However, investing in stocks carries risks — companies can underperform, and share prices can decline, potentially leading to losses. Many financial experts recommend stocks as part of a diversified investment portfolio, particularly for long-term wealth building, despite their short-term volatility.
How Does Stock Trading Differ From Crypto Trading?
Stock trading operates in fundamentally different ways and environments than cryptocurrency trading.
Nature of Assets
Stocks represent ownership in a company, entitling shareholders to a portion of the company’s profits and assets. Additionally, stocks may offer dividends as a portion of profits distributed to shareholders, providing a potential income stream.
Trading Time
Stock trading takes place on regulated exchanges during set business hours. For example, from 9:30 AM to 4:00 PM Eastern Time for the New York Stock Exchange.
Cryptocurrency trading, in contrast, occurs 24/7 on various crypto exchanges worldwide. The crypto market never closes, allowing for constant trading activity across time zones.
Regulation
Stock trading is regulated by government agencies like the SEC, providing investor protections and requiring companies (issuers) to maintain transparency.
Volatility
The volatility levels of various stocks also significantly differ. Stock prices typically move based on company performance, economic data, and market conditions, but tend to show more stability over time.
Settlement Period
Stock trades usually settle in one business day (T+1) in the US.
How to Trade Stocks on Crypto.com
Trading stocks on Crypto.com is managed through Foris Capital US LLC, a registered broker-dealer, and is currently available to US citizens only. The platform offers access to over 5,000 stocks and ETFs directly through the Crypto.com App.
To get started, users must first set up a Stocks account by:
1. Going to the Stocks tab from the home screen.
2. Tapping ‘Buy’ or ‘Sell’ to begin the account creation process.
3. Following the on-screen instructions to:
- Review and accept the relevant agreements and disclosures.
- Provide personal information.
Account verification can take up to three business days. Trading occurs during standard market hours (9:30 AM to 4:00 PM ET, Monday to Friday).
Find more information on setting up a Stocks account in the Help Centre.
Order Types for Stocks on Crypto.com
Users can place two types of orders:
- Market Orders: Execute at the current market price with guaranteed execution but not price.
- Limit Orders: Execute at a specified price or better with guaranteed price but not execution.
To purchase stocks:
1. Select the desired stock from the Stocks tab.
2. Tap ‘Buy’ at the bottom of the screen.
3. Choose between ‘Market’ or ‘Limit’ Order.
4. Input either the dollar amount or number of shares (minimum $1 or 1 share).
5. Select funding method:
— Available USD from Stocks Cash.
— Or fund the Stocks Cash account from the USD Fiat Wallet.
The platform supports fractional shares for most stocks, allowing investors to purchase partial shares with as little as $1. Orders placed outside market hours are queued for execution when the market opens.
Fees
Notably, Foris Capital US LLC doesn’t charge commissions for stock trading. Users manage their stock purchases through ‘Stocks Cash’, which is their USD balance in the Stocks account. This can be funded through their USD Fiat Wallet.
To enhance liquidity, transfers between Stocks Cash and the USD Fiat Wallet are instant during business hours. Outside these hours, transfers process the next business day.
Crypto.com’s broker-dealer also offers these features:
- Corporate action notifications
- Account statements and tax documents
- Transaction history tracking
- Ability to transfer securities from other brokerages (i.e., Automated Customer Account Transfer Service, or ACAT)
Visit the FAQs to learn more.
Buying Stocks With Cryptocurrency on Crypto.com
Users cannot buy stocks directly with cryptocurrency since the stocks are available only through our broker-dealer, and SEC and FINRA rules do not permit the purchase of stocks with cryptocurrency.
Users can sell their cryptocurrency for US dollars into their USD Fiat Wallet, and during normal market hours, instantly transfer their USD balance into their Stocks account. This two-step process works as follows:
- When placing a stock order and selecting ‘Crypto.com Wallet’ as the funding method, users will first need to select which cryptocurrency they want to convert to USD.
- The purchase is then split into two transactions:
- The cryptocurrency is sold and converted to USD.
- The USD is used to buy the stock or ETF.
- The cryptocurrency is sold and converted to USD.
It’s important to note that users are not directly buying stocks with cryptocurrency. Rather, Crypto.com automatically handles the conversion to USD first, since stocks must be purchased with USD through Foris Capital US LLC, which is the regulated broker-dealer handling the stock transactions.
Advantages of Stock Trading on Crypto.com
Trading stocks on Crypto.com offers several advantages:
No-Commission Trading
- Foris Capital US LLC doesn’t charge any fees for opening a stock account. Foris Capital US LLC also does not charge any commissions for trading stocks and ETFs.
- Foris Capital US LLC does, however, pass on certain regulatory fees from the SEC and FINRA that apply to transactions; other fees may also apply.
Flexible Investment Options
- Access to over 5,000 stocks and ETFs.
- Ability to trade fractional shares with as little as $1.
- Option to fund purchases with either USD or cryptocurrency.
Protection and Regulation
- Trading is conducted through Foris Capital US LLC, a registered broker-dealer.
- Member of FINRA and SIPC, thereby providing standard industry protections and insurance up to $500,000.
- Clearing services through Apex Clearing.
User-Friendliness
- Instant transfers between Stocks Cash and USD Fiat Wallet during business hours.
- Corporate action notifications.
- Easy access to account statements and tax documents.
- Comprehensive transaction history tracking.
Additional Features
- Transfer bonus programme offering up to 3% bonus on securities transfers from other brokerages.
- $100 offer for first three transfers of $2,000 or more.
Conclusion
Stock trading on Crypto.com bridges traditional financial (TradFi) markets and the cryptocurrency ecosystem through its partnership with Foris Capital US LLC, offering a compelling solution for investors looking to diversify their portfolios with multiple asset classes across Crypto.com.
The commission-free trading structure, fractional share capabilities, and funding options make it attractive to newer investors and those interested in both crypto markets and traditional securities markets. While currently limited to US citizens, stock trading on the platform provides SIPC protection.
Important Disclosures
All examples listed in this article are for informational purposes only. You should not construe any such information or other material as legal, tax, investment, financial, cybersecurity, or other advice. Nothing contained herein shall constitute a solicitation, recommendation, endorsement, or offer by Crypto.com to invest, buy, or sell any security, or any coins, tokens, or other crypto assets. Returns on the buying and selling of securities and/or crypto assets may be subject to tax, including capital gains tax, in your jurisdiction. Any descriptions of Crypto.com products or features are merely for illustrative purposes and do not constitute an endorsement, invitation, or solicitation.
Securities are offered to US persons by Foris Capital US LLC, Member FINRA/SIPC. Foris Capital is a separate entity from Crypto.com, Foris DAX, Inc., and other affiliated Foris companies. Foris Capital does not engage in the sale, transfer, or custody of cryptocurrencies or digital assets.
Transfer Bonus and Transfer Fee offer is only applicable to eligible securities. Terms and conditions apply. Refer to the FAQs for more information. Fractional shares are not available for all equities.
Foris Capital US LLC is a member of SIPC, which protects securities of customers of its members up to $500,000 (up to $250,000 for cash claims). For additional information regarding SIPC, including obtaining a copy of an SIPC brochure, please contact SIPC at (202) 371-8300 or visit the SIPC website at www.sipc.org.
Past performance is not a guarantee or predictor of future performance.
