The two American players are seeking to establish themselves in the individual and professional markets. But with a different strategy.
Predictions for the cryptocurrency market’s worth by the end of 2018 are on track. Whatever the amount, this market will be the heyday of crypto-currency exchange platforms, which have increased from 70 to 190 in three years globally. However, just a few actors will remain in the end. Coinbase and Circle are shooting one other in the leg in the European and American markets in the hopes of becoming the number one exchange. The first, founded in 2012, has provided a crypto-currency platform solely for people from its beginning.
The second, founded in 2013, was responsible for the creation of a blockchain-based payment service for people (Circle Pay) before beginning crypto-currency trading activity for institutions. “They are definitely trying to be the merchant bank for the cryptocurrency world,” says Karim Sabba, co-founder of the French cyber currency management organization (AFGC) and Woorton, a crypto liquidity provider.
Coinbase enrolled 50,000 new clients a day last year and set a record by enrolling 100,000 new users in one day during the late-2017 bitcoin price rise.
This success can be attributed to the platform’s ease of use. To purchase or sell cryptocurrencies, you do not need to be an experienced trader. Furthermore, the Coinbase product is offered in 32 countries and many languages, including French. The only disadvantage is that the commissions are expensive. Coinbase charges between 1.49 and 3.99 percent for each transaction, depending on your payment type. In comparison, Kraken customers must pay a charge of 0.16 to 0.26 percent, while Asian Binance users must pay a commission of 0.1 percent.
Circle responded early this year by developing Circle Invest, a smartphone app for prospective investors. Users may trade seven cryptocurrencies (compared to Coinbase’s five) with no commission. Circle Invest is now only accessible in the United States, but the company intends to expand throughout Europe. “We are not making any promises about a precise date. In terms of target nations, the implementation will be comparable to what we accomplished with Circle Pay “Circle CEO Jeremy Allaire recently told JDN. The individual payment application has been steadily pushed out across Europe and is currently available in 28 European nations. “Circle Invest will be able to rely on the Circle Pay user base, which is an advantage,” says Karim Sabba.
Circle made another significant step toward retail success earlier this year when it paid $400 million for Poloniex, a US bitcoin trading platform. “Last year, it was a highly popular independent exchange with a large customer base. This takeover is an excellent option “Karim Sabba said. “Circle is stabilizing the exchange, particularly on the infrastructural side, before relaunching it with a fury,” he says. Poloniex was one of the top 20 cryptocurrency exchanges by volume in 2017, with over $70 million transacted each day ($35 million today). Above importantly, it provides 100 cryptocurrencies in over 100 different nations.
Enough to boost Circle’s striking power. And even more. Developers of blockchain applications “We want to assist them in launching tokens since it allows them to generate funds as well as establish new technology ventures,” Jeremy Allaire explained.
Circle’s second purchase is Poloniex. In October 2017, the business paid an unknown sum for Trigger Finance, a mobile investing platform that it utilized to develop Circle Invest. Two more firms were acquired by him, but their names and dates of the acquisition were not published. Coinbase, for its part, has acquired 10 startups, eight of which have occurred since the beginning of the year.
Coinbase will be allowed to act as an investment broker and advisor as a result of these purchases. As a result, it will be allowed to provide a broader selection of tokens (or tokens) to its customers, particularly those classified as financial securities and transferable securities (or securities) by the American financial regulator.
Individuals are not the only ones who benefit from the two exchanges. Circle is the one who is racing ahead this time. Circle Trade, its institutional platform, manages the equivalent of $2 billion every month, with a minimum entrance ticket of $250,000 USD. It provides its professional customers with 15 different crypto-currencies. Gdax, a platform for institutional investors developed by Coinbase in 2015, was rebranded Coinbase pro in May. The exchanged monies are not disclosed.
Coinbase Custody, a tailored solution for institutional investors, was launched in early July by the American exchange. Forcoursgültig cheval Club Dongültig cheval privategültig chevalatorgültig chevalgültig cheval Dongültig cheval Octobergültig cheval Dongültig chevalgültig cheval chevalgültig cheval Dongültig chevalatorgültig cheval solidgültig cheval chevalgültig cheval chevalcours chevalatorgültig cheval cheval cheval Not to mention the 0.1 percent monthly fee on assets kept. Ten investment funds have joined Coinbase since its inception, including 1confirmation (headed by Peter Thiel) and Polychain Capital, a cryptocurrency hedge fund. According to Business Insider, a hedge fund that wishes to stay secret has entrusted Coinbase with the administration of $20 billion in assets. The American corporation intends to acquire 100 consumers with this offer by the end of 2018. Circle, for its part, has not yet disclosed any custodial initiative.
Management firms have also made direct investments in platforms. Coinbase is sponsored by 29 investment firms, including Andreessen Horowitz, Union Square Ventures, and Draper Associates, who participated in Coinbase’s most recent $108.1 million financing round. The Californian firm raised a total of $225.3 million. Circle outperforms it, raising $246 million in five years.
Circle’s backers include big funds such as Accel and four blockchain-focused funds such as Pantera and Blockchain Capital. Traditional financial institutions have also placed bets on the two cryptocurrency titans. Coinbase persuaded The Bank of Tokyo-Mitsubishi UFJ ($41 billion in sales in 2017), The New York Stock Exchange, and USAA, a financial services firm that serves the United States Armed Forces. Meanwhile, Goldman Sachs and its Chinese counterpart CICC have placed bets on Circle.
Circle is now valued at $3 billion, while Coinbase is valued at $1.6 billion, following their separate financing rounds. There is no information available on their turnover. Coinbase would have made $1 billion in sales in 2017, according to Recode. According to Superfly Insights, a corporation that specializes in mobile revenue, 43 percent of its turnover was obtained in December. The American corporation, however, has neither acknowledged or rejected this information. The Circle side has the same opacity. The workforce is the only number to get your teeth into. Circle now has 150 workers and plans to have 400 by the end of the year, thanks in part to the acquisition of Poloniex. Coinbase (300 employees). It intends to recruit around 150 workers by the end of 2019. Quite different from the staff of American investment banks (37,300 for Goldman Sachs, for example). However, the merchant bank of the cryptocurrency era may not require as many employees.
