Crypto’s Falling Prices See Coinbase’s Popularity Decline

Francisco Memoria
  • Coinbase's traffic has been declining since December, when most cryptocurrencies hit their all-time highs.
  • The company's CEO seems to be above the decline, as he claims to use the down cycles to "build a strong foundation," to later on thrive.

Prominent San Francisco-based cryptocurrency exchange Coinbase is reportedly seeing its popularity drop due to the price decline most cryptocurrencies have been enduring. The company’s download rankings have fallen to their lowest among US finance apps since April 2017.

According to Quartz, Coinbase’s app was the top finance app in the US back in December - when most cryptocurrencies hit their all-time highs. Bitcoin, the flagship cryptocurrency, came close to $20,000 at the time, but has since declined to about $6,300 at press time, according to CryptoCompare data.

Coinbase, which recently added support for GBP deposits and withdrawals, saw its app fall to 40th place in the June download rankings, seemingly affected by the market’s bearish trend. As Quartz points out, users may still access it via its website, which according to SimilarWeb also saw traffic plunge.

Per the website’s statistics, Coinbase’s traffic plunged from 126 million monthly visits in January, to about 28 million in June.

traffic overview Coinbase.png

The company has been building services that may affect its overall traffic in the past few months. After saying goodbye to its Global Digital Asset Exchange (GDAX) and rebranding it into Coinbase Pro, which launched to little fanfare, the San Francisco-based startup launched the Coinbase Index Fund, which gives US accredited investors exposure to digital assets listed on Coinbase Pro.

Coinbase is reportedly valued at $8 billion, making it one of the most valuable companies in the cryptosphere behind Bitmain, which was valued at $12 billion in a funding round. It makes money by charging transaction fees and made over $1 billion in revenue last year, Quartz repots.

The decline hasn’t exclusively been affecting Coinbase, however, as most cryptocurrency exchanges have seen traffic decline on their websites. A few exceptions include leading crypto exchange Binance, and controversial exchange FCoin, which launched a new revenue model called “trans-fee mining.”

Coinbase’s co-founder and chief executive officer Brian Armstrong has last month revealed he isn’t affected by the bear market, and presumably by declining traffic, as it uses the “down cycles to build a strong foundation,” so as to thrive when the bullish run comes.

Coinbase’s problems may not just be related to the bear market, however, as various companies have launched competing platforms. Square’s Cash app has recently started letting users buy and sell bitcoin without charging fees, and made $200,000. Stock trading app Robinhood has also launched Robinhood Crypto, allowing its millions of users to buy and sell cryptocurrencies without dealing with fees.

BitBond CEO Radoslav Albrecht Talks STOs, ICOs and Crypto Mass Adoption

Bitbond

One of the interesting applications of crypto and blockchain technology that is seeing actual use is business lending.

Bitbond is a company that offers business loans to small and medium-sized businesses using crypto. Based in Germany, Bitbond aims to tap into the enormous SME lending market, and sees blockchain as the means to do it.

We spoke with CEO Radoslav Albrecht about Bitbond, the future of STOs and ICOs, the regulatory landscape in Germany and what he thinks will pave the way for mass crypto adoption.

When did you get interested in crypto?

A good friend told me about Bitcoin in 2012, however, I didn't get into crypto until about a year later when I was researching efficient cross border payments.

What led you to create Bitbond?

As a consultant at Roland Berger, I was exposed to many different banking projects and quickly learned how inefficient lending processes were in the industry. This made me realise that there was huge potential for a platform like Bitbond that could automate much of the process while also reaching SMEs all over the world. Today we’re proud to provide financing in under 30 minutes making Bitbond perhaps the fastest way for a business to receive capital.

How do loans work via Bitbond?

Business owners apply for a loan through our borrower application. The application process is very simple. Entrepreneurs provide basic information about their business via an intuitive online application. This takes about 15 minutes and is done exclusively online.

Bitbond focuses on online / e-commerce sellers.  Businesses in this space typically sell on eBay, Amazon, Etsy, Shopify and many other large platforms. These have great APIs which we connect with in order to learn as much as possible about the health of the business.

Not only does this approach allow us to assess the creditworthiness of an SME very reliably, but it allows us to do our credit scoring very quickly. So if a borrower is approved he/she can receive funding in 24hrs after their application.

In terms of the technical side, we leverage blockchain technology for efficient cross-border payment processing and developed our own machine learning powered credit scoring algorithm.

What distinguishes Bitbond from other blockchain lending platforms?

Bitbond targets small business owners and aims to fill the 2 trillion dollar funding gap for SMEs.

Also, Bitbond is the first lending platform to service SMEs globally. This is great because we have a huge addressable market as a company. At the same time, we reach many business owners in remote locations who otherwise wouldn’t have access to capital. In order to make this happen, we need an efficient way to send money across borders.

When we launched Bitbond in 2013 we started by using bitcoin for payment processing. Today we primarily rely on EUR-denominated tokens that are issued on the Stellar blockchain. Stellar is more scalable and more cost efficient for our use case than bitcoin and by using the EURT we eliminate all foreign exchange risk versus the Euro.

Do you think “STOs” are the new “ICO”: Is the ICO model something you think the industry should move away from?

I think in the long run there is a place for both ICOs  and STOs. Crypto started with this anarchistic, decentralised community that was strongly influenced by the Cypherpunk community. STOs move away from this mentality and are a more regulated and less decentralised version, however, it is not a fundamental change in the industry and as I believe there is a place for both.

The ICO wave may have subsided but I believe it will return alongside STOs, both of these types of token sales just add to the innovation and diversity of the crypto landscape. Overall I feel STOs are complementary and not a replacement for ICOs and together they will push innovation in the blockchain space.

Do you think the mad bull run of 2017 and subsequent crash was a net positive or a net negative for the industry?​​​​​​

The bull run did an incredible job of introducing crypto to the mainstream. For example, recent studies show that 50% of American millennials are now interested in using crypto and millions of people own at least one type of coin.

Of course, the crash had a negative impact on the industry in the short term, but it also provided an important learning opportunity for entrepreneurs and investors who believed that prices would just keep going up.

Finally, I would say that crashes are inevitable in almost any industry, but it’s the recovery that is important. In the case of crypto, we’re now seeing much healthier growth and I would say that the bull run was a net positive as a result.

What obstacles do you see ahead before we can reach mass crypto adoption?

Crypto/blockchain is primarily an infrastructure technology, like Linux. Therefore it entirely depends on the use-cases that entrepreneurs and businesses develop on top of it. There are many excellent examples of tokens which have the potential to be used by the mainstream. I think our BB1 token is one example, and Brave’s BAT is another.

That being said there are some clear challenges ahead. The first one regards scalability and is probably the oldest problem in the blockchain industry. Bitcoin, Ethereum and many other popular tokens do not have the capacity to process a large volume of transactions. For the BB1 token, we chose Stellar which can reportedly process around 4,000 transactions per second - far more than the 7 that Bitcoin manages. Nevertheless, mainstream adoption would require closer to 40,000 transactions per second, so we still have work ahead of us.

Another important issue I’d like to touch on is usability. At Bitbond we’ve put a lot of time and effort into making our service as simple as possible. As crypto-natives it’s easy to forget how intimidating the jargon and hexadecimal strings can be to a beginner. In order to achieve adoption, we need to make the process of buying, selling and using crypto as intuitive as possible.

As a crypto company based in Germany, what’s your opinion of the German regulatory landscape?

Bitbond was the first BaFin regulated blockchain company in Germany. We received our licence in October 2016 and have been in continuous communication with the regulator since then.

We’ve been impressed with BaFin’s openness to new technology and have benefited from the guidance they have provided. The fact that our security prospectus was approved is a very encouraging sign to other crypto companies looking at alternative forms of fundraising.

With that in mind, I believe that the regulatory landscape is already good and getting better in Germany due to a high level of awareness about the space with lawmakers.

What’s on your roadmap for the rest of 2019?

Our goal is to make fast and affordable capital available to SMEs all over the world. Our STO will not only help us achieve this goal, but will also open up attractive interest rates to both retail and institutional lenders.

With regards to our roadmap for 2019, the first important step is the successful conclusion of our STO. Then we will begin paying BB1 holders on a quarterly and annual basis. Importantly, the Bitbond STO concludes in July, meaning that your readers need to act fast in order to receive payouts.

As a special offer, we’d like to share a unique discount code for CryptoGlobe readers. To receive a 5% discount, simply enter CC5BB1 during the checkout process. Do bear in mind the code is valid until the end of May.

The raised funds will be reinvested into SMEs all over the world. That means that BB1 holders not only receive smart passive income, but they also improve the lives of entrepreneurs living in some of the most disenfranchised places on earth.

The majority of the funds raised in the Bitbond STO are going towards funding loans originated on our platform. Some funds are being invested in activities such as growth and marketing to allow for Bitbond to reach more SMEs and fund more loans on Bitbond. This will help Bitbond increase its global presence and allow Bitbond to provide funding SMEs on a larger scale.

Therefore the funds raised in the STO will greatly determine our roadmap for 2019. However, the main goal is to scale up Bitbond and provide funding to more small businesses while giving our investors great stable and secure returns.

Stable and secure returns are uncommon terms in the token sale landscape. But this is where we think the Bitbond Security token offering can differentiate from other tokens as it can provide a real security based asset comparable to a bond, that anyone can invest in and be an investment that can be counted on to add to investors passive income year on year.

If you would like to ask me more questions about Bitbond and our STO,  we are hosting a live webinar with a question and answer session on Monday, 27th of May at 7 pm (CET). To join our webinar click this link.