Goldman Sachs-backed Circle makes a play for crypto-trading noobs

Boston-based Circle has become one of the top destinations for institutional investors looking to trade crypto. Now, the Goldman Sachs-backed startup, worth nearly $3 billion, is adding a feature to its mobile app that cofounder and CEO Jeremy Allaire hopes will convince more retail investors to get off the sidelines and add crypto to their portfolios.

“In the retail arena we think there’s still a major market need for people who haven’t invested in this space,” Allaire says. “[They] want a product where they can invest in a broader range of assets without becoming day traders.”
Existing offerings from Coinbase, Square, and Robinhood are designed around buying individual cryptocurrencies, one by one. Circle Invest’s new feature, in contrast, gives retail investors exposure to seven cryptocurrencies—bitcoin, bitcoin cash, ethereum, ethereum classic, litecoin, monera, and Zcash—based on their market capitalization.
For Allaire, the feature points to Circle’s broader vision. “We think there’s going to be this really broad proliferation of crypto assets,” he says. As a result, the number of digital assets that people invest in will “grow exponentially.” Over time, in his view, products that bucket and track those new assets in automated ways will become essential.

Rachel Mayer, a senior product manager who oversees mobile app Circle Invest, has been overseeing the development of the new feature, dubbed “Buy the market.” Thanks to Circle’s institutional trading infrastructure, pricing for “Buy the market” will be lower than that of competitors’ products, she says.

“Right now every coin on Circle is sourced and delivered through Circle Trade,” says Mayer, with an average markup of 1% for each coin. “Buy the market” takes the aggregate of the seven coins’ spreads.

In addition, “Buy the market” allows users to link their bank accounts and make an investment of up to $10,000 with just a few clicks—the type of simplicity that won Coinbase its millions of users.

As of Wednesday morning, Circle Invest ranked No. 187 in the App Store’s finance category. Square’s Cash App remained in the No. 1 spot, with Robinhood at No. 18 and Coinbase at No. 24.