Steve Cohen-backed start-up bets on 24-hour trading so investors can react instantly to tweets
Steven A. Cohen
Hedge-fund billionaire and NY Mets owner Steve Cohen has invested in a crypto start-up that aims to launch a stock exchange with 24-hour trading.
Cohen’s venture-capital fund Point72 Ventures is leading a $14 million funding round for 24 Exchange, a Bermuda-based crypto and foreign exchange trading platform that wants to bring the non-stop trading of the digital currency world to the stock market.
“The same people that trade cryptocurrencies started to trade more stocks because of the GameStop movement and the overall participation of retail that [has] increased significantly,” said Dmitri Galinov, founder and CEO of 24 Exchange. “If Elon Musk tweets something on Saturday, people would want to buy or sell Tesla stock.”
Trading sessions in the U.S. stock market start at 9:30 a.m. ET and end at 4 p.m. on weekdays, and extended trading allows investors to trade as early as 4 a.m. and as late as 8 p.m. Trading is already relatively thin during after-hours that could sometimes lead to wild price swings.
A record number of new, younger traders entered the market during the coronavirus pandemic to ride the epic rebound in stocks. The retail craze reached a crescendo when a group of so-called meme stocks including GameStop and AMC skyrocketed in a massive short squeeze earlier this year. Online brokerages such as Robinhood, Fidelity and Charles Schwab all experienced rapid growth over the past year.
24 Exchange also sees strong demand for 24-hour trading among overseas investors.
“Overseas exchanges started to list U.S. stocks and trade outside of U.S. hours,” Galinov said. “It’s very clear to us that overseas investors are excited about Apple, Tesla and other great American companies.”
The company has filed a draft application with the U.S. Securities and Exchange Commission to approve 24-hour trading. Galinov said he expects a decision in the summer of 2022.
“We are vertically integrating. We are relaying retail clients directly into the exchange, bypassing the broker. We are combining all these asset classes into a wholesale system that will open up to retail and they can benefit from low prices,” Galinov said.
Over the long term, the firm has its eyes on securitization of various digital assets that are not currently under the SEC realm, including crypto and non-fungible assets, or NFTs.