Bitcoin is getting a very real boost on Monday, January 26th, 2015 with the opening of the first licensed U.S. Bitcoin exchange by Coinbase.
On Monday, the San Francisco-based Bitcoin company, which recently raised a whopping $75 million funds from the NY Stock Exchange, Spanish bank BBVA and multiple VC firms, opens the first regulated bitcoin exchange based in the U.S.
Coinbase said its exchange will provide greater safety either for individuals or institutions which will have the possibility to exchange bitcoin and have a real-time control of the world’s most popular and discussed virtual currency’s costs. The launch comes just a few days after the Winklevoss twins’ announcing the plans to open their own U.S.-based Bitcoin exchange.
T-minus 17 hours https://t.co/eB0on92NRJ
— Coinbase (@coinbase) January 25, 2015
Half of all states gave “regulatory approval” to the brand-new exchange named Lunar. Among the states that approve it one can find such important areas like California and New York. The percentage that Coinbase will take of most transactions is not high. It’s about 0.25%. Moreover, according to Fred Ehrsam, a co-founder, during the first 2 months the company won’t take any fees.
Initially, the exchange is restricted to the U.S. users, but Chief Executive Brian Armstrong, 32, unveiled his plans to extend it abroad. Mr. Armstrong also noted that he expected to draw attention of both individuals and businesses looking to exchange bitcoin. “Our goal is to become the world’s largest exchange,” he said.
Surely, not all banks dislike cryptocurrencies. For example, Spanish bank BBVA has invested in Coinbase. That action made it one of the first important financial institutions to make a bet on Bitcoin.
Last week, Coinbase raised $75 million in its latest funding round, which also included investment from the New York Stock Exchange and US financial group USAA. According to the post on the company’s blog:
“Today we are pleased to announce that Coinbase has raised $75 million in Series C financing, the largest funding round to date for a Bitcoin company. This brings our total capital raised to $106 million. The round was led by DFJ Growth, with participation from our existing investors, including Andreessen Horowitz, Union Square Ventures, and Ribbit Capital.
Three of the world’s most respected financial institutions – The New York Stock Exchange, USAA, and BBVA (a large multinational bank) – also invested in the round alongside personal investments from former Citigroup CEO Vikram Pandit and former Thomson Reuters CEO Tom Glocer. This marks the first time that financial institutions have made a major investment in a Bitcoin company.”
Still, the exact size of BBVA’s contribution was not announced. Jay Reinemann, BBVA Ventures executive director, said regarding the investment:
At its core, Bitcoin is a decentralized protocol that enables exchange of value among parties around the world, giving it the potential to alter the financial services landscape.
About 2.2 million consumer wallets are linked to the company and almost 40,000 merchants use its services. It counts about 75 employees and is planning to work in at least 30 countries by the end of the year, up from 19 today.
Fred Ehrsam told Fortune that Coinbase has grown extensively during 2014, despite the plummeting price of bitcoin: “Price volatility isn’t good for certain uses of Bitcoin,” says Ehrsam . Still, he highlights the fact that the number of users increased from 600,000 to 2.1 millions.”
Armstrong is quite optimistic as well. He compares Bitcoin’s importance to the Web:
“We are just seeing a classic hype cycle. The Internet in 2001, the NASDAQ crashed down. In many ways, bitcoin is the most exciting technology since the Internet, we think.”
Obviously, 2014 was a great year for Coinbase. The company managed to land different large retail associates, such as Mozilla, Overstock, Square, Dell, and Wikipedia.
Well, Coinbase’s story has a good beginning as well as all chances of success in the future.
Eugenia graduated from Minsk State Linguistic University with a degree in Intercultural Communication, Translation/Interpretation (Italian, English). Currently she works as a business analyst, freelance interpreter and tutor. She’s fond of numismatics, photos, good books and sports, adores travelling and cooking.