Coinbase and other incumbents like it have recorded massive success in the cryptocurrency ecosystem in a very short period of time. The success of such companies can be attributed to the inherent nature of cryptocurrencies like Bitcoin, which is volatile in nature, and its massive RoI. Another reason behind such impressive growth is that these companies were the first movers in the industry.
CB Insights’ research on consumer-facing fintech startups and their growth reveals how these companies got to where they are now. Technological innovation in the financial industry has been progressing rapidly over the past 10 years, especially since cryptocurrencies and blockchain started taking a jab at it. Since most of these innovations are aimed at transforming consumer experience, the adoption rate is at an all-time high.
Among the list of companies analyzed by CB Insights, three crypto-based startups stood out; namely, Coinbase, Circle, and eToro for having more than 1 million user accounts. Coinbase had approximately 20 million accounts and was the second highest among the 20 companies. eToro had 10 million accounts, Circle had 7 million accounts.
Further, Coinbase was the most valued at $8 billion, among the list of 20 startups that included Credit Karma, SoFi, Dave etc. eToro was the first to disclose an equity raise of $1.7 million. Coinbase and Circle were among the Unicorns valued at $1 billion or more.
CB Insights stated,
“Cryptocurrency has been the most viral product that any of these companies have leveraged to launch their entry into the consumer fintech space. Coinbase and Circle, for example, were 2 of the earliest players to capitalize.”
Coinbase has acquired more than 20 million users in less than 2 years, whereas E-Trade, which has been around for more than 4 decades, only has 5 million users. The research further outlined,
“Other startups that have capitalized on customer demand for access to cryptocurrencies include stock trading apps EToro and Robinhood, and challenger banking app Revolut. All 3 added 2M+ customers following their respective product announcements. Despite a cool down in the cryptocurrency markets in 2018, all have continued to grow their user bases, like EToro — which topped 10M accounts and launched in the US in early 2019.”