So You Think You Want To Start Investing in Cryptocurrencies, eh?
After a wild 2017, some will say you are cryptoCRAZY. Others will tell you of their 1000%+ returns earned through investments in cryptocurrencies like Bitcoin and Ripple.
Let’s say you are curious enough to give it a try.
How do you actually get started?
One of the more popular entry points today is through a digital currency exchange like Coinbase, an online platform created in 2012 that helps investors and institutions buy, sell, and trade cryptocurrencies.
Started by ex-Airbnb software engineer and University Tutor founder, Brian Armstrong, Coinbase has not only survived the crypto world volatility but has thrived as one of the world’s leading “digital wallets” for investors of all types.
So How Does Coinbase Work?
Understanding that many are still skeptical and intimidated by the crypto world, San Francisco’s Coinbase set out to create a user-friendly platform that eases the jump into digital currency trading.
To get started, all you have to do is create a login, link your bank account, and Walla! You are ready to start buying and selling digital currencies with the rest of the world.
Today, the platform supports five cryptocurrencies: Bitcoin, Litecoin, Ethereum, Bitcoin Cash, and Ethereum Classic.
Coinbase has three unique products that are each designed for different user types:
- The basic Coinbase offering is geared towards more novice crypto traders who are just getting started in digital currency trading.
- Coinbase Pro launched in May is meant for advanced traders who want more control over their portfolios and deeper insight into market activity.
- Coinbase Prime, also launched in May, is built for institutional clients. Very recently, the company added a $20B hedge fund to its user base and plans to sign on several others in the near future.
In June, Coinbase announced it will enter the Japanese cryptocurrency market, bringing its global footprint to 34 countries.
Additionally, the company is exploring supporting a number of other altcoins including Cardano, Basic Attention Token, Stellar Lumens, Zcash, and Ox.
Coinbase Experiencing Growing Pains
Last year alone, Coinbase generated $1B in revenue, just six years after the company’s founding. Today, Coinbase boasts a user base of 20M+ accounts, which The Washington Post highlighted is double what Charles Schwab manages and on par with what Fidelity Investments oversees.
Since the company’s launch, more than $150B in digital currency has been exchanged on the platform.
With respect to venture capital funding, Coinbase has raised a total of $225M and was valued at $1.6B last summer, making the company the first crypto player to earn “Unicorn” status, a highly coveted label given to start-ups that are valued at more than $1B.
But Coinbase’s growth has come with its fair set of challenges.
Due to the spike in crypto adoption and interest in 2017, Coinbase’s infrastructure struggled to keep up with its growing user base and transactions.
In May, the company’s VP of Operations and Technology, Tina Bhatnagar, reported that the company had increased its support team by 150% and decreased a backlog of issues by 95% in the 90 days following an event involving duplicative transactions that were posting to investor bank accounts.
Coinbase was also at the center of a major court ruling where a federal judge ordered that the company turn over information for over 14k site users who conducted almost nine million transactions. The IRS had reason to believe a number of these traders hadn’t paid federal taxes on their crypto profits between the years 2013 and 2015. This is likely to be a recurring theme as digital currency trading spreads faster than regulatory bodies can keep up.
On top of this, major digital currency values continue to rise and fall on a daily basis and many people are still wary of cryptocurrency as a secure and safe bet.
Even with all of this, Coinbase Founder and CEO, Brian Armstrong, isn’t phased by growing pains or market volatility.
“After many years of this, I’ve come to enjoy the down cycles in crypto prices more. It gets rid of the people who are in it for the wrong reasons, and it gives us an opportunity to keep making progress while everyone else gets distracted.”
“The thing I’m passionate about with digital currency is the world having an open financial system.”
This Untold Business story reveals how important it is to understand what your current and future customer base wants and how they are feeling. This is especially true when you are operating in an exciting, yet intimidating ecosystem like the cryptocurrency world.
As the crypto world continues to develop and push into the mainstream, digital currency exchanges like Coinbase will grow increasingly important. Brian Armstrong knew how important these platforms would become and built an offering that caters extremely well to non-early, majority adopters who will be essential in helping cryptocurrencies succeed over the long term.
People want security and clarity when they are jumping into the unknown. Coinbase has provided that which is why it is one of the most popular digital exchange platforms today for both individuals and institutions.
Hit the streets. Talk to real people. Learn what they want and then give it to them!
August 3, 2018 | By Chris Fruci – Untold Business Writer