May 31, 2022

Why Structure: Market Access

Investing

Market

3 min read

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If you’re from North America or Europe, you’re not going to really feel this, but in most places in the world access to global capital markets is really poor. Whether we like it or not, we live in an economy that is globalized, democratic-ish, and ceaselessly capitalistic. This is the game we’re all born into; but you cannot win at a game you’re excluded from playing. Thus, access to global capital markets for as many people in the world as possible is a necessary step towards seeing more equity. For instance, for more than a decade Alphabet (Google’s parent company) and Apple have been considered ‘blue chip’ stocks. In the last five years, Alphabet has increased 158% and Apple 350%. However, five years ago the vast majority of the world’s population could not invest in these or similar companies. Therefore, even if you were interested in technology and felt strongly that the industries were likely to prosper, if you didn’t live in the US or were very wealthy, you could not invest and realize these kinds of returns. Despite decades of globalization, capital markets are still strongly regional and exclusionary. Structure is working to address this fundamental global inequality.

Conversely, this market structure has a tendency to also keep capital in the US and Europe. While most large investment firms offer “Emerging Market” funds that channel investment capital outside of the developed economies, it has been nearly impossible for individual investors in the US to choose individual stocks in emerging markets. This has restricted the flow of capital to markets that might be able to better utilize the funds and generate competitive returns. Because capital tends to attract capital, it accumulates in US and European exchanges further exacerbating global capital inequality. Hence, most of the world cannot invest in the markets that have most of the capital, while the people in those markets have little opportunity to invest in the rest of the world. At Structure, we argue this makes no sense.

Even if you have good access to capital markets, the asset universe is diverse, as are the types of things people want to invest in; but no platforms offer access to everything, or even the 75% most-popular. Consequently, people’s attention and capital gets dispersed and fragmented across a handful of platforms, which ultimately takes away from their investing productivity. For instance, Coinbase offers 96 cryptocurrencies and 0 stocks while Robinhood offers 5,000 stocks — US exchanges only — while listing 7 cryptocurrencies. Just to trade a few coins and US stocks requires at least two platforms. To access foreign assets would require even more. Investors end up having to keep track of platforms, fees, policies, passwords, interfaces — all of which distract from that which they ostensibly exist to promote: investing. Because of this, the Structure team is doing everything it can to bring as many asset classes as it can under one roof, so that the trading and investing experiences are as straightforward and unified as possible. Structure is working to make ‘global’ markets truly global for the first time by creating a simple, integrated app that works everywhere and invites everybody, even those who have been historically excluded.

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