Why Your Platform Needs Bitcoin Now

Regular people around the world are demanding convenient places to buy bitcoin

Wyre
Wyre Blog

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By Neil Woodfine

Live images of users attempting to register at a popular bitcoin trading platform (Golaem)

Demand for bitcoin is growing at a blistering pace, but venues to acquire bitcoins are still few and far between, and those that do exist are often difficult to use. In this article we’ll be running through the huge opportunity this presents to platforms with an existing user base.

Latent Demand

Bitcoin is pretty hot right now. At the retail level, every millennial and their grandmother are interested in getting involved. And in the last few weeks, we’ve been seeing the first wave of institutions getting involved, such as legacy heavy-weights Goldman Sachs and even JP Morgan[1] announcing plans to take cryptocurrencies more seriously.

This isn’t surprising. Bitcoin has seen an average of 0.4% of daily compounding gains since 2010, and there are suggestions that bitcoin exchanges are becoming more profitable than banks. More broadly, the public perception has changed from, “does bitcoin have value?” to, “how much value should bitcoin have?”. Very few people talk about whether bitcoin is a bubble anymore[2].

Bitcoin price tracked on a logarithmic chart — a bubble or an adoption curve? (Moonmath)

Unfortunately, bitcoin companies have traditionally produced some poor user experiences which can hold back the average investor. This usually comes in a few forms:

  1. Payment methods: regulations, chargeback risks, and difficulty obtaining bank accounts for bitcoin businesses, stack up to make sending money to platforms often very slow and cumbersome.
  2. Complexity: bitcoin exchanges typically require users to learn some fairly specialised interfaces and vocabulary before being able to purchase their first piece of bitcoin.
  3. UI: For some reason, many bitcoin startups seem to hate hiring competent UI designers.
Don’t make your users crawl under their desks (Btcartgallery)

The New Kids on the Block

This has left the door wide open for established, user-friendly platforms like Cash App, Revolut, and Robinhood to launch their own bitcoin trading services and capitalise on the pent-up demand.

The reaction has been huge for all these companies.

Since launching their bitcoin trading feature, Square’s Cash App sold over $34m worth of bitcoin in Q1, and the company’s stock value increased 57%. Its user growth also accelerated past competitor Venmo, thanks largely to their timely bitcoin adoption.

Revolut didn’t do badly either. They added another 700,000 users after introducing crypto trading to their digital banking service. In April, they raised $250 million, valuing the company at $1.7 billion.

“…the thing that stands out is the embrace of crypto. Looking at Revolut’s sky-high valuation, other financial startups will feel pressure to add services for things like bitcoin. At some point, established banks could feel the heat as well.”

- John Detrixhe, Quartz

Robinhood, perhaps the biggest winner, added over one million user registrations in three days after announcing their crypto trading feature. That was just the waiting list. They then went on to raise a whopping $363m in funding[2].

It’s quite clear: if you can create an easy way for users to trade bitcoin and other cryptocurrencies, there are few better ways to attract users and grow your business right now.

The unicorns are coming.

Why Now?

Bitcoin is very much a price-driven market. In a bull market, demand gets so fierce that bitcoin trading platforms historically struggle to onboard new customers fast enough. Scaling, while remaining secure, is tough.

But for now, we’re in a quiet period. The bitcoin price has corrected, and a lot of the noise has subsided (but none of bitcoin’s value propositions have gone away). Launching bitcoin services takes time, so now is the perfect opportunity to build, test out features, and load test in preparation for the next inevitable bull run.

“How to buy bitcoin” search trend over the last 5 years (Google)

Because if bitcoin’s history has taught us anything, another rally is undoubtedly on the way. And trying to launch a new service once that’s in full swing is always going to be fraught with risks.

Then there’s the fact that this global $500bn market (and still growing!) is crying out for solutions right now. Even with established businesses like Cash App, Robinhood and Coinbase servicing the U.S., the game is still wide open there. Outside of the U.S., Revolut has been doing a great job in Europe, but broadly, most potential users have no idea where to obtain bitcoin conveniently.

BTC:USD logarithmic price chart: The bitcoin industry is highly price driven. In a bull market, user demand becomes difficult to keep up with (jb)

Future-proofing

It’s becoming increasingly apparent that bitcoin and cryptocurrencies are not going away. If they continue to grow at their current pace, and start replacing parts of the traditional financial system, companies that have not adapted will risk being left behind. This applies to both fintechs and banks.

Wyre’s leaving no one behind… (Paramount Pictures)

How to Launch

If you’re convinced you need to look into launching a bitcoin/crypto service, normally the key things to consider would be:

  • Hiring — you’ll need some experienced talent — bitcoin is complex!
  • Compliance — how to navigate the regulatory environment in your jurisdiction for this very new asset class.
  • Security — secured properly, bitcoin is one of the most secure asset classes there is, but all too often platforms don’t take this seriously and pay the price.
  • Liquidity — partnerships with multiple bitcoin liquidity sources and prepare the requisite trading strategies.

In all of these areas, Wyre can help. Since 2014, Wyre has been providing bitcoin services to both consumers and businesses alike. Via our “plug-and-play” API, we take care of the bitcoin heavy lifting for you, allowing you to simply focus on taking your solution to market.

To find out more, get in touch with us at api@sendwyre.com, give us a call on +1 (415) 374–7356, or check out our site.

In our next article, we’ll be explaining how platforms can get going with bitcoin quickly and painlessly via the Wyre API. Make sure you don’t miss it, and let us know anything specific you’d like to see in the comments below!

Footnotes

[1] JP Morgan CEO, Jamie Dimon, famously called bitcoin a fraud earlier this year. A rather dramatic U-turn is almost complete.

[2] Remember when the banks were telling everyone that bitcoin had no value and was comparable to tulips? Looks like they’ve changed their minds, but still have an opinion on how much “it should” cost.

[3] Personally, aside from the latent demand, I think a major driver of Robinhood’s crypto trading growth was their fantastic marketing campaigns.

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