Stocks rose sharply on Wednesday, rebounding from losses earlier in the week. Investors got pretty much exactly what they wanted to hear from the Federal Reserve’s Monetary Policy Committee, which left interest rates in the 0% to 0.25% range and signaled a potential delay. to start withdrawing its quantitative easing program. The Dow Jones Industrial Average (DJINDICES: ^ DJI), S&P 500 (SNPINDEX: ^ GSPC), and Nasdaq Composite (NASDAQINDEX: ^ IXIC) were all up about 1% on the day.

Data source: Yahoo! Finance.

The financial sector has recently faced challenges from the Fed’s actions as a flatter yield curve devastated net interest income and hurt banks’ financial results. However, this is arguably good news for disruptive fintech companies looking to supplant traditional banks.

The two Robinhood Markets (NASDAQ: HOOD) and SoFi Technologies (NASDAQ: SOFI) have made forays into the fintech arena, and both stocks have made big leaps as investors hoped for positive results from their latest initiatives. Below, we’ll take a closer look at Robinhood and SoFi to see what sparked excitement on Wednesday.

Robinhood Expands Cryptocurrency Offerings

Robinhood Markets shares ended up nearly 11% on Wednesday. The popular brokerage app has extended its platform’s capabilities in the cryptocurrency arena, and investors were delighted to see Robinhood reaffirm its strategic focus on crypto as a key long-term growth engine. .

Robinhood has revealed that it will start doing user testing of a cryptocurrency wallet product from October. The move will expand what users can do with their crypto tokens, and Robinhood is hoping the enthusiasm for key niches in the crypto markets could have a positive impact on his own business.

In particular, Robinhood’s crypto wallets will allow users to move digital tokens in and out of brokerage accounts. While users can currently buy and sell cryptos on Robinhood, they must leave their tokens on the Robinhood platform.

Many cryptocurrency traders are not entirely comfortable with such arrangements as they take responsibility for securing their crypto tokens with their hands and potentially exposes them to cyber attacks on Robinhood and its custodial partners. cryptocurrency. In addition, users will be able to participate more fully in areas such as non-fungible tokens, which have recently gained in popularity.

Robinhood’s lack of additional fees on cryptocurrency trading gives clients a competitive advantage over using most platforms, which still charge commissions. The wallet feature, which could be available to the general user base by early 2022, would reinforce this advantage.

SoFi obtains a vote of confidence

Elsewhere, SoFi also gained 11%. The neobank-fintech has received favorable comments from Wall Street analysts which have resulted in new enthusiasm on the part of shareholders.

The praise came from analysts of Jefferies (NYSE: JEF), which launched the SoFi cover with a buy rating and a target price of $ 25 per share. Jefferies sees SoFi driving impressive user growth, and it’s a critical part of the cross-selling strategy that she and her other neo-banking institutions are using to gain traction and retain customers. By fostering the acquisition of new members, SoFi could see its revenues grow at an average annual rate of over 45% over the next four years.

In addition, SoFi has even greater aspirations. The company is seeking a federal banking charter, which would increase SoFi’s lending capacity by giving it a single set of regulators at the federal level rather than dealing with 50 different state jurisdictions and regulatory agencies. Additionally, a charter would give SoFi greater autonomy in setting prices and interest rates, as well as opening the doors to its global payment processing platform Galileo.

Even with today’s gains, SoFi stock is well below its highs of last year. However, shareholders are hopeful that SoFi’s long-term aspirations pay off and reward their patience even better.