Trade Republic is a German trading platform that has been around since 2015 and has recently started allowing crypto trading as well.
Initially it allowed trading on stocks, ETFs, and derivatives, but over time it has also added cryptocurrencies.
The interesting thing is that it is in fact a German bank regulated by BaFin and Bundesbank, therefore with a level of security that is practically institutional.
Summary
The cryptocurrencies available on Trade Republic
The heart of the platform is made up of trading stocks and ETFs.
However, obligations and derivatives are also added to this, and in recent years even cryptocurrencies.
As for the crypto markets, it offers trading of Bitcoin, Ethereum and other 50 cryptocurrencies, but it does not allow deposits or withdrawals of crypto.
In fact, deposits and withdrawals can only be made in fiat currency (euro) while all tradable assets are held by custodians, including HSBC bank.
So it cannot be fully defined as a crypto exchange, because it is not possible to deposit your own cryptocurrencies to sell them. It is a trading platform that also allows, among other things, to buy cryptocurrencies, but only to resell them.
The characteristics and objectives
Trade Republic allows you to make trades starting from 1€.
It is therefore a trading platform aimed at a mass audience, predominantly retail, and in fact offers several services that are clearly aimed at this audience.
For example, it offers the possibility to set up PACs (Accumulation Plans), a typical investment tool for retail investors.
However, what it is probably most famous for is the 4% active interest on deposits, and the 1% saveback on the card.
It is indeed possible to activate a 4% annual interest rate on liquidity up to €50,000, with daily calculation and monthly payments.
Furthermore, it provides its customers with a Visa debit card to make purchases everywhere, and instead of offering the usual cashback, it offers the so-called saveback, that is, 1% of purchases up to €1,500 per month can be transferred to their PAC.
Another service clearly aimed at retailers is the so-called round-up, which consists in rounding up to the nearest whole euro the expenses made with the card, in order to automatically invest the excess in a chosen asset among those available.
Its goal is evidently to democratize access to financial markets, so much so that the company claims to have become the leading savings platform in Europe. They declare four million customers from 17 different countries, with total assets of around 35 billion euros.
The platform does not have its own crypto token.
Investments on Trade Republic
The flagship product is ETF-based PACs, because they allow you to invest in a diversified way in hundreds of stocks or bonds even with single transactions.
In this way, even a novice user can achieve diversification with generally low management costs, especially with the prospect of obtaining long-term returns.
Furthermore, this also allows for minimal investments, with a minimum amount of 1€, which opens the doors to a multitude of small investors and retail speculators.
It should be noted, however, that the spread commission would be 2%, so not particularly convenient.
Another successful product, always linked to the PAC, is the saveback, which aims to make every purchase also a small investment.
In this sense, the goal that the company wants to achieve is to convey the message that starting to invest is important for everyone.
It is not surprising, therefore, that the platform has also enabled crypto trading, since many investors and retail speculators are very interested in this type of investment.
Trade Republic: The new generations are attracted to crypto
Platforms like Trade Republic were born with the precise purpose of providing financial services to the new generations.
These are generally recent platforms, or very recent, different from those of the past that were aimed at boomers or GenX.
Millennials definitely have different perspectives and goals, not to mention Gen Z which generally does not yet have enough capital to invest.
Targeting young people with little experience, these platforms must be very easy to use, as well as secure, and must provide automated investment tools to make investments as easy as possible for those who still struggle to use more complex tools.
Traditional platforms tend to focus on the boomer and GenX generations, mainly because their customers belong largely to these two generations. For millennials, and especially for GenZ, they are difficult to use, complex, and not very understandable.
This has opened up huge opportunities for those who want to offer a new and simplified investment experience to the new generations, so much so that Trade Republic’s initiative in this regard is not the only one.
Moreover, there is a huge difference in how digital tools and the internet are used by those who are native digital users compared to those who are not.
For this reason, young platforms like Trade Republic are not only very different from traditional ones, but often are not even particularly attractive to older generations.
