Time for start-ups in this ‘exploding’ market
Cryptocurrency is growing fast and sharp start-ups and investors will take advantage of initial coin offerings to make money. Are you ready?
Cryptocurrencies have been around in various guises since the 1990s, but it wasn’t until the arrival of Bitcoin – the first decentralised cryptocurrency – in 2009 that digital currency came of age.
There are now hundreds of cryptocurrencies in existence and more and more merchants accept such payments. While their legal status can vary from country to country, there are exciting and fully above-board opportunities opening up for savvy entrepreneurs and investors.
But what are these opportunities…?
Cryptocurrency: an exploding market
The cryptocurrency world has burst into life. You may not yet have heard about initial coin offerings (or ICOs as they’re referred to by some), but start-ups have cottoned on to this as a way to raise finance without having to follow the rigorous and regulated processes that banks and venture capital firms have to apply to keep on the side of the Financial Conduct Authority (FCA).
An ICO is a crowdfunding method in which start-ups try to sell their underlying crypto tokens in exchange for Bitcoin or ether.
A massive number of new investors have entered the marketplace, eager to participate in the unprecedented gains that have already been made.
Recent numbers indicate that the influx of cash into the crypto sphere has been so massive that the overall market cap has now reached near $200bn. New ICOs are hitting the market daily, and more are coming online every week. Even with news from China regarding ICO bans, the market continues to explode.
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All this has made the crypto sphere ideal for start-ups. Everything from dental care to banking seems to have a new start-up associated with it. And these start-ups are garnering investment through these non-traditional means. However, no matter how they raise funds, start-ups still need customers to succeed, and it remains the most difficult part.
Growth creates growth
Companies can begin to seek ICO funding before any practical use cases or real sales opportunities have occurred. This leaves investors exposed to companies that do not have real sales models, and will not succeed.
Cryptocurrency investors are seeking new ways to leverage their investments, hedge against loss, and create new stability that is equivalent to traditional banks.
That’s where CryptoPay – a London-based Bitcoin firm started in 2013 – has stepped in. CryptoPay is starting a major new arm of the company with services for the growing cryptocurrency investment world. These include Bitcoin debit cards and a payment gateway for merchants. Its ICO is designed to meet the needs of cryptocurrency investors and start-up businesses alike.
The new business model for the company is built around building cryptocurrency solutions that provide traditional banking and financial instruments for the cryptocurrency world.
For example, the company is planning to create a crypto stock exchange where cryptocurrency holders will be able to leverage their funds up to four times. It will also be able to diversify into traditional financial marketplaces, as well as hedge against the risk of loss.
It also plans to build a peer-to-peer platform to underwrite and run the book for new ICOs, in the process centralising some of the complexities around ICOs.
As the crypto sphere continues to explode with new ICOs, companies that have an existing customer base, and thriving current businesses, stand to do far better financially, both internally and for investors.