The Bitcoin industry’s most popular and widely utilized cryptocurrency exchange ShapeShift has raised $10.4 mln in a series A round led by European venture capital firm Earlybird.

For over eight years since the introduction of Bitcoin in 2008, the Bitcoin Dominance rate hardly dipped below the 90 percent mark. However, as alternative cryptocurrencies or altcoins gained popularity, cryptocurrency exchanges including Shapeshift experienced a rapid increase in trading volumes.

Altcoins

Naturally, the Bitcoin Dominance rate started to decrease as cryptocurrencies such as Ethereum, Dash and Monero started to gain serious momentum. Ethereum, in particular, grew exponentially in terms of market cap and development community, due to the Blockchain congestion of Bitcoin.

The emergence of the Enterprise Ethereum Alliance and the involvement of multi-billion dollar finance and technology companies in the development of Ethereum pushed its market cap to an all-time high and it is currently close to reaching a $5 bln market cap.

"According to various digital currency market data providers such as CoinMarketcap, the majority of Ethereum trading is accountable to the BTC/ETH pair. In fact, 50 percent of all Ethereum trading is settled between Ether and Bitcoin users."

Most digital currency users rely on two cryptocurrency exchanges in Poloniex and ShapeShift to process digital currency to digital currency trades. Therefore, the trades between Bitcoin, Monero, Dash, Ether, ETC and other popular altcoins are almost entirely processed by Poloniex and ShapeShift.

Non-custodial platform

Since its launch in 2014, ShapeShift has branded itself as the go-to platform for trading digital currency. Its rival exchange Poloniex works closer to a high-performance trading platform designed for day-to-day or high profile traders. ShapeShift in contrast operates more as an instantaneous digital currency trading platform wherein users are not even required to sign-in or register to trade. Users can simply visit the platform, select which cryptocurrencies they wish to trade and process the payments.

This non-custodial component of ShapeShift also protected many users against various hacking attacks and security breaches. Usually, when an exchange with a centralized infrastructure suffers from a hacking attack, funds and sensitive information of users can be at risk. However, when ShapeShift suffered a hacking attack in 2016, customers did not lose any of their funds or personal information.

Erik Voorhees, the CEO of ShapeShift, stated:

“What we saw when we started was that tokens were going to become a widespread phenomenon. We believed there would be Blockchain tokens representing all sorts of value beyond currency, and that’s become increasingly true, which is why ShapeShift’s frictionless exchange is important.”

More importantly, Voorhees emphasized that the platform has been growing at an average rate of 48 percent per month since 2014, with an average monthly trade volume of 50,000 Bitcoins. Based on the current price of Bitcoin, that is equivalent to a $52.5 mln average monthly trade volume.