What Makes A Successful Crypto Platform?

April 21, 2021
Kevin Larkin

As the cryptocurrency world becomes ever more expanding, more fintechs are either developing to serve as exclusively crypto trading platforms or offer it among their current services. But with the global competition being so stiff, how can these fintechs stand out above the pack and what key features are necessary for a successful crypto platform? Maximilian Friedrich, who is a top fintech analyst at Cathie Wood, put Venmo, Cash App, and Coinbase up against one another to see if he could answer this question and hopefully determine the strengths and weaknesses of each. According to a Business Insider article, Friedrich said that what mattered most for a consumer trying to determine which platform they will use is how much they are willing to spend on crypto assets. In his analysis, Friedrich found that “As far as fees go, Cash App was the cheapest for low-level bitcoin buys, while Coinbase was better for larger crypto purchases, and Venmo was the most expensive overall.” The trend in this analysis seems to be that Cash App and Coinbase are very equitable, just coming down to user preference, but Venmo is in a league far below both companies. Friedrich mentions that Venmo often charges higher fees and offers significantly less cryptos on their platform for users to purchase and transact in.

To put the comparison in more quantitative form, if a user were to purchase a $1, or 0.83, of bitcoin, they would be charged a €0.025 fee on Cash App, no fee on Coinbase, and a €0.42 fee on Venmo. This is easily a significant difference for anyone considering buying large amounts of bitcoin, which is currently the world’s leading crypto by a landslide. The leader of lowest fee does slightly vary depending on the quantity of bitcoin purchased, but for the majority of values Venmo seems to come in last place pretty consistently. However, if a user is looking to get far more involved with the crypto market and do more with currencies other than just bitcoin, then Coinbase is the obvious answer. Coinbase offers users the ability to buy, hold, sell, send, and withdraw over 50 cryptocurrencies. Friedrich makes an important note that these companies aren’t directly comparable, as the services and features offered vary drastically and it could ultimately come down to user preference as opposed to a hard quantitative analysis. However, it should make it slightly easier for users to make a conscious decision on what platform fits right for their specific needs.

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