The CEO of the oldest bitcoin exchange says all platforms are struggling with ‘the massive, massive amount of new users’

Nejc Kodrič, the CEO and cofounder of Bitstamp.

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Nejc Kodrič, the CEO and cofounder of Bitstamp.
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Bitstamp

  • New customer sign-ups on cryptocurrency exchange Bitstamp rose from 10,000 a week at the start of 2017 to over 100,000 by the end of the year.
  • Surge corresponded with the huge rise in the price of bitcoin last year, Bitstamp CEO said.
  • Bitstamp had to hire huge amounts of new staff and streamline processes to cope with the influx, CEO said.
  • Rival platforms have close off new sign-ups altogether while they deal with their backlogs.

LONDON – New customer sign-ups to the world’s oldest cryptocurrency exchange jumped by 1,000% last year as the price of bitcoin skyrocketed.

Nejc Kodrič, the CEO of Luxembourg-based Bitstamp, told Business Insider that average new customer sign-ups rose from between 5,000 and 10,000 a day at the start of 2017 to over 100,000 a day by the end of the year.

“At the peak, it was 137,000 accounts opened [on one day],” Kodrič said.

“There is a very strong correlation between price and the amount of new users. If you look at the graph, you can quickly figure out when it really started. For us, the whole year was just gradual growth up until the last quarter [of 2017], then it just exploded.”

Bitcoin rocketed over 1,500% against the dollar last year, rising from around $440 per coin at the start of 2017 to a peak of over $19,000 in December. The cryptocurrency has since come off its highs and has crashed to below $12,000 on Tuesday.

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Kodrič told BI that Bitstamp grew its headcount last year to cope with the sign-up surge, from a “few dozen” to between 150 and 200 staff. Some teams, such as onboarding and customer service, grew tenfold.

Even still, Kodrič said: “Our team, plus two third-party providers, are still not enough to keep up with the demand. We are maxing out the capacity that those two companies provide to us and it’s still not enough.”

Rival exchanges such as Bittrex, Bitfinex, and CEX.io have stopped onboarding new users altogether in response to unprecedented demand.

“All of the exchanges right now have a problem with just the surge in the massive, massive amount of new users,” Kodrič said.

Some users have taken to Twitter to complain of sign-up delays of 1 to 2 weeks on Bitstamp, but Kodrič said the company is beginning to bring this time down.

“We cannot guarantee that someone will be onboarded that we would like – we cannot onboard somebody in 24 hours, which is what we would want to achieve – but we are getting there with the improvements we are making,” he said.

Bitstamp is also dealing with a backlog of customer service enquiries, Kodrič said.

“The profile of new users has changed a bit,” he said. “We’re getting more mainstream users who are not that savvy with investing. That just brings a mass of support tickets with questions, basic questions. That is clogging the system.”

Bitstamp, founded in 2011, has 3 million registered accounts and 500,000 active trading accounts. The exchange, which is the only licensed platform in Europe, is the 14th biggest in the world and had a 24-hour trade volume of $320 million as of Monday afternoon.

Bitstamp has “more than enough internal cashflow to sustain the growth of the company,” Kodrič said.

Bitstamp raised £7 million ($10 million) from Pantera Capital in 2013 and £1.7 million ($2.4 million) through a crowdfunding campaign at the start of 2017.