The adoption curve of crypto starts with bitcoin (BTC), before moving to ethereum (ETH), decentralized finance (DeFi) and other cryptoassets, the US-based crypto exchange Coinbase said in an earnings call this week. They also noted that the current market cycle “feels less speculative” than past cycles, with real use cases coming into focus.

In terms of a typical user’s journey into crypto, Coinbase’s Chief Financial Officer (CFO) Alesia Haas said that people generally start with bitcoin, before they move beyond just buying and holding BTC, ETH or other cryptocurrencies offered on the exchange.

“And what we see there is an adoption curve that starts with Bitcoin, typically then moves to Ethereum but is quickly then picking up to other cryptoassets. And we’re seeing those investors looking for allocation to DeFi, finding ways that they can make bets in the growing innovation of crypto broadly,” Haas said.

Meanwhile, the comments from Coinbase about activity on its platform last quarter were similar to remarks from the exchange from May last year when the exchange said that the vast majority of its clients go on to trade altcoins and other digital assets after first buying bitcoin.

“Among customers with at least five purchases, 60% start with bitcoin but just 24% stick exclusively to BTC,” the exchange said at the time.

Back then, however, Coinbase also admitted that the “increasing drive” to non-BTC assets “is in part due to” its own business strategy that has involved the “continued addition” of new altcoins and other tokens.

However, in this most recent call, the CFO also noted that the market feels less speculative this time around, and that it appears to be “driven by utility and broader adoption of crypto.”

Sharing a similar sentiment did also Coinbase’s CEO Brian Armstrong, who emphasized that today’s crypto market has matured in a number of ways compared to earlier cycles.

"I think if you go back, really, you know, three, four, five years, a lot of these cycles in crypto were more speculative in nature," Armstrong said, adding that people back then were buying crypto mainly because they thought it would rise in price.

“People were always asking me back then […] when are the use cases going to be here,” Armstrong further said, before adding: “Luckily, nobody is really asking me that question anymore.” 

He went on to mention non-fungible tokens (NFTs), staking, borrowing, lending and the Coinbase Card as examples of some of these new use cases.

Asked about how interest in crypto has evolved both on the retail and institutional side, Armstrong reiterated that the entire market in the past was “more speculative in nature,” and that they’re now seeing broader use. “We’re always trying to think a little bit longer term. But to me, the most important thing is how do we drive more people actually using crypto for more things,” he said.

Instagram-style NFT marketplace

Meanwhile, Coinbase also revealed some of their future plans in the fast-growing NFT space, saying they are making progress with their plans to launch an NFT marketplace, while drawing inspiration from social media.

“[W]e’d like to make the Coinbase NFT a little bit more like, you know, Instagram as opposed to say an auction like eBay or something like that,” Armstrong said.

He went on to say that the company wants to create a social kind of experience where users can follow their “favorite artists or creators,” while also having the ability to showcase NFTs they have bought on their own social profile pages.

“In addition to that, I think we can just make, hopefully, NFTs much easier to use,” Armstrong added, arguing that things like connecting browser extension-based wallets is a friction point the exchange wants to overcome with its own NFT marketplace.

“And hopefully, you will see something launched in the next couple of quarters here,” the CEO said.

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