Andreessen Horowitz-backed neobank Current explains why launching crypto trading during a massive downturn is actually good timing

by Arthur · October 14, 2022

It may seem strange that many fintechs, including Betterment and Step just this week, are launching cryptocurrency trading services during the so-called crypto winter, as the prices of the assets have crashed in recent months. And yet neobank Current, known for its early deposit feature and high-yield savings accounts, is now among them, launching its much-teased crypto trading feature this week.

“For us, it’s really about access — we didn’t time this release with a crypto winter, we got it to market as quickly as we could when we said, ‘Okay, there’s value here,'” Trevor Marshall, Current’s chief technology officer, told Fortune. Current CEO Stuart Sopp added that “for a product’s growth and attachment rate and all those things, you probably don’t want to launch at the height of the high,” he said Fortune, noting that it may also be more beneficial for users to get into crypto at lower prices (adding that it is not investment advice). Unlike industry titans like crypto exchangeCoinbase, which recently took a big hit to transaction revenue due to the crash, Current doesn’t care much about how many people trade, and how often, to the extent that they don’t monetize the feature — at at least not right now.

As a zero-fee service for Current, “we don’t see this as a primary revenue stream,” Sopp said. Instead, the value for Current is keeping users in its ecosystem of other revenue-generating products and services: “Engagement even with a limited number of trades drives retention into the platform,” Marshall noted. The crypto trading feature, which has been active since Wednesday, only allows users to buy and sell crypto for now, offering 27 tokens (including, of course, Bitcoin and Ethereum, as well as others like Dogecoin). The company, which claims to have over 4 million users, says customers can get instant liquidity from crypto trading into their checking accounts, which they can then deposit into savings.

The company is working with several third-party firms to facilitate trading and hold the crypto, as Current currently does not hold any crypto, Marshall said, declining to be named.

Current is far from the only fintech to venture into crypto, and fee-free trading is not unique to them either. The move comes at a time when other fintech players in more traditional financial spaces are adding crypto capabilities to their platforms. This week, roboadvisor Betterment launched crypto investing, which includes four thematic crypto offerings, while Gen Z neobank Step also launched Bitcoin investing on Tuesday. Anchor players like PayPal and Block, formerly Square, have been at the forefront, adding crypto trading features to their apps in recent years (Block’s Cash App, for example, skyrocketed in popularity during the crypto boom of 2021).

Marshall argues that since they offer a bank account plus crypto, they’re not in direct competition with the likes of Coinbase, but he admits they’re up against fintech stalwarts like Revolut, the $33 billion UK-based startup that also offers zero- fee (up to $200,000 a month) crypto services, as well as PayPal. But for Marshall, the difference “really comes down to precedence, meaning we’re where our customers get their paycheck.”

The company has ambitions to expand further into crypto and Web3 in ways that could become revenue drivers. “This is really just the beginning of a longer crypto roadmap for us, and I think there’s more direct monetization available in some of the more advanced types of features that we want to build,” Marshall noted. Sopp said that providing access to USDC, the stablecoin pegged to the US dollar, as well as wallet capabilities, is Current’s “natural next step.” The new crypto feature isn’t Current’s first foray into the space: Marshall noted that they originally started building bridges to the likes of Ripple in the early days.

However, the macroeconomic environment has been rocky for technology and fintech companies, and Current has been working to improve margins and slow hiring to recover, Sopp says. The fintech was last valued at $2.2 billion after a $220 million funding round in early 2021, and firms such as Andreessen Horowitz and Tiger Global Management are backing the fintech. Even amid the difficult climate, Sopp says “we probably won’t need to raise next year,” but that “everyone is going to see sometime next year,” referring to other startups. He estimates that they could be profitable in 2024.

As for a potential IPO, that’s something Sopp “definitely” wants to do — but not anytime soon.