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Revolut Offers Breakthrough Fractional Trading

Revolut Offers Breakthrough Fractional Trading
By Vin Narayanan
Date August 19, 2019

Crypto isn’t always about crypto. Yes, that sounds like something the great modern philosopher Yogi Berra would have said. But it’s true. Crypto is beginning to influence the way we think about the world – and investing. And fintech startup Revolut is a prime example of some core crypto concepts entering mainstream investing.

Revolut, which is based in the U.K., is the European equivalent of the Square Cash app. It has around 4 million customers. It enables cheap, instant payments and cash withdrawals (domestically and across borders, which is handy in Europe), easy bill payment, and the ability to buy crypto.

And one of its investors is Draper Esprit. Draper Esprit is essentially the Berkshire Hathaway of European tech startups.

All of that makes Revolut interesting. But what makes Revolut remarkable is what it did on August 1.

That’s when it launched a trading platform to compete with Robinhood. And Revolut’s trading platform does something most crypto investors are familiar with – it allows fractional trading.

So what is fractional trading? In crypto, it means that you don’t have to buy a full bitcoin or a full litecoin to invest. You can buy $100 worth of bitcoin or $100 worth of litecoin. As I write this, bitcoin is trading at around $10,000. So if you buy $100 worth, you’re not getting a full bitcoin, just a piece of one.

On Revolut, you can buy pieces of stocks. Take Google, for example. As I write this, Google is trading around $1,164. Using a traditional broker, you would need $1,164 to buy a share of Google (not including any fees). But if you were trading on Revolut, you could invest $100 and own just a piece (8.59%) of one share of Google. That’s revolutionary.

All of a sudden, expensive shares like Google, Amazon (currently trading around $1,820) and Booking Holdings (currently trading around $1,938) are within reach of everyday investors.

That’s a huge breakthrough for investors. And stocks are not the only asset class going the fractional route. Real estate development (imagine owning a tiny piece of a New York skyscraper!) and artwork are already headed in this direction as well. And that’s just the beginning. Ship cargo, diamonds and the supply chain can all be fractionalized – and tokenized.

Before crypto, fractional assets were just a pipe dream. And then crypto not only made fractional assets possible but also prompted people outside of crypto to figure out how to incorporate fractionalization as well.

Crypto’s influence on the investment community is growing. And as more people become familiar with crypto’s inner workings, you’ll see more elements of the crypto ecosystem entering other markets and other parts of life.

That’s an exciting development for investors. And we can’t wait to see what happens next.

Good investing,

Vin Narayanan

Senior Managing Editor, First Stage Investor

P.S. Revolut doesn’t operate in the U.S. right now. But if you’re interested in fractional shares, you can sign up for its waitlist here.

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