LocalBitcoins sees spike in revenue despite loss of market share
One of the first companies offering cryptocurrency peer-to-peer (P2P) trading services, LocalBitcoins, has reported positive numbers for its 2019 annual revenue. The total revenue reported was $29.5 million, which represents 10% more than the revenue reported in 2018, which had been $26.9 million. On a less positive note, the company reported a slight drop of 6% in its annual operating income to $19.8 million.
LocalBitcoins recently implemented a new know-your-customer (KYC) requirement for users, which has brought a few changes. Ironically, while the company added more staff to help with the extra work generated by the new KYC process, the company lost a portion of its market share due to this implementation. “2019 was an invaluable learning experience for us, as we implemented anti-money laundering and know-your-customer (KYC) regulations,” said LocalBitcoins CEO Sebastian Sonntag. “As expected, undesired activity was driven away from the platform and the implementation of KYC itself was a challenging process. Despite these, we were able to deliver growth and excellent earnings.”
The firm reported 1.46 million new users who signed up during 2019, and 913,000 were active users who generated over $2.8 billion in volume in more than 15.6 million trades. Based on this report, the average trade size was $179.48. Sonntag also noted that the platform continues to grow strong showing positive signs this year, including a 50% increase in the number of sign-ups. From January to today, the total signups went from 4,000 to 6,000 if compared to 2018 results.
This has been a good year for several P2P crypto companies, and the leader of the market continues to be Paxful. It is currently the biggest rival for LocalBitcoins, which has been taking over most part of the trading volume since early June.