Peer-to-peer (P2P) cryptocurrency exchange LocalBitcoins saw a 10% increase in its revenue last year despite facing more competition from the likes of Paxful.
LocalBitcoins Revenue Surges
Finnish-based cryptocurrency peer-to-peer exchange LocalBitcoins reported its 2019 revenue on July 1. According to the company, the revenue recorded in 2019 was 10% higher than what was reported the year before. LocalBitcoins reported revenue of $29.6 million, which is higher than the $26.2 million in revenue recorded the year before.
The surge in revenue comes despite the cryptocurrency market being in a protracted bear state, with the prices of most digital currencies trading below their all-time highs. For 2019, operating income declined by 6% to $19.9 million from the $21.2 million reported in 2018. However, LocalBitcoins did not provide details about its net profit.
In addition to this information, LocalBitcoins added that roughly $2.8 billion in volume was traded in 2019 from 15.6 million transactions. Sebastian Sonntag, the LocalBitcoins CEO, stated that 2019 was a year filled with learning experiences for the company as they implemented the anti-money laundering (AML) and know-your-customer (KYC) regulations. The changes led to undesired activities that drove away some customers from the platform. Despite the challenges of implementing the KYC and AML policies, LocalBitcoins has been able to deliver growth and excellent earnings in 2019.
The trading platform added 1.46 million new users in 2019, the company added. However, the stricter know-your-customer (KYC) requirements put in place in the first half of 2019 drove away some of their customers, both existing and new.
LocalBitcoins Continues to Grow
During the review of the platform, LocalBitcoins highlighted that the number of active users on their trading platform was 913,000. The CEO is now looking to the future as they seek to make more improvements.
Sonntag stated that for 2020, there are various reasons to be optimistic. He stated that the introduction of KYC and AML policies had reduced illicit activity on their trading exchange, making it more secure and trusted for their customers. In addition to that, LocalBitcoins has returned to a growth path despite a few challenges experienced along the way.
He concluded by saying that their customers seem to be recognizing their efforts, as seen from LocalBitcoins TrustPiliot ratings of 4.8 given by more than 25,000 customers. So far, LocalBitcoins has been able to grow its daily new customer signups by over 50% since the start of the year. They were recording 4,000 new daily signups before but the number of new daily signups have now increased to over 6,000.
The increasing number of new customers is a sign of healthy demand for their services and a great future potential for the crypto exchange. However, Sonntag believes that change will take time, and they need to stay humble and keep on providing excellent services to their customers.
LocalBitcoins has given up some of its market share to Paxful, which is providing tough competition in the P2P space. Data obtained from Tulips shows that Paxful is now the top P2P exchange in terms of trading volume last month. Paxful experiences about $25 million worth of BTC traded on its platform every week.