Cryptocurrency trading continues to soar in popularity. Research published earlier this year found that more than 100 million people worldwide now own one cryptocurrency or another; in the US, one in 10 investors are now trading crypto, with only stock markets, mutual funds and property attracting larger inflows.
With trading volumes on the rise worldwide, crypto trading platforms are battling for market share – and attracting significant interest from investors. None more so than the start-up Coinrule, which is today announcing the completion of a $2.2m seed funding round backed by a crop of high-profile fintech names, including former founders of Fitbit, Twitch and Kayak.
Coinrule’s point of competitive differentiation is that it offers automated crypto trading strategies. Rather than simply acting as a broker, the platform has built a series of strategies for investors to follow that mimic the approaches taken by professional investors to exploit market opportunities and provide downside protection. Investors can choose to adopt one of these strategies, or build their own. The platform also provides a back-testing facilities so that investors can see how individual strategies would have fared in previous market conditions.
“This is about addressing inequality, because 90% of the crypto market is controlled by the big investment banks and hedge funds,” says Gabriele Musella, one of Coinrule’s co-founders. “We want to put normal people on a level playing field – to give them the opportunity to implement the same strategies and to learn as they invest.”
Professional crypto investors, Musella points out, employ teams of coding specialists to build algorithms that automate their crypto trading activities, with key market moves implemented at the best possible moment. That approach is very difficult for ordinary investors, he says; even if they have the market expertise to employ similar strategies, they likely lack the coding skills to implement them.
“With our platform you don’t need those skills because we’ve built around 200 strategies you can choose to automate,” says Oleg Giberstein, another Coinrule co-founder. “Or you can build your own strategy on the platform with plain English instructions, rather than in code.”
It is a model that is proving popular with investors. The platform has grown rapidly over the past 12 months and now has more than 13,000 investors worldwide; trading volumes now exceed £100m a month.
Coinrule sees itself as offering “edutainment”. Investors on the site enjoy trading, but there is also an important opportunity to build expertise, with back-testing and dummy trading facilities that enable people to get to grips with crypto investment without having to commit themselves. “We are very clear that people should not be comfortable trading more than they can afford to lose,” Musella adds.
Once they are ready to deal, the platform is integrated with a number of leading crypto exchanges, including Coinbase, Binance, Kraken and Bitstamp, so that investors can place their trades. Coinrule automatically finds the best price for a given trade across the exchanges it works with.
The platform’s pricing model is also geared towards supporting newcomers to the market. Trading for beginners is essentially free, with Coinrule subscribers able to place trades worth up to $3,000 a month at no charge, and to secure free access to a limited number of trading strategies and other resources. The platform also offers services priced from $29.99 a month to $449.99 a month for more experienced investors who are looking to trade larger sums and to access more sophisticated functionality.
Having validated the business model with rapid customer growth, Coinrule is now looking to step up the pace. To that end, its $2.2m seed round gives it the firepower to broaden its functionality, expand its market reach and, in particular, to invest in the social element of the platform. The company sees building a community of users who share ideas and strategies as fundamental to its development.
Marquee investors in the funding round include Fitbit founder James Park, Twitch founder Kevin Lin, and Kayak founder Paul English. Importantly, the company is also joining the influential accelerator Y Combinator as part of its 2021 cohort.
Coinrule sees scope for rapid growth, both as interest in crypto trading continues to accelerate and as it broadens its service. In time, the platform intends to offer automated trading strategies in other asset classes, including the equity market.
“The opportunity is clear and present for Coinrule to help a range of people with crypto assets to generate value and protect their assets,” adds Musella. “Learning to trade manually is difficult and time consuming and the relative knowledge of professional and hobbyist investors is very different, and so is their access to opportunities.”