Exclusive: Moneybox Crypto Launch. Will other fintechs follow suit?

A year after AltFi revealed Moneybox’s crypto ambitions, the company says it is “de-prioritizing” a crypto product due to market volatility in digital assets.

Image source: Ben Stanway/Moneybox

Moneybox puts its plans to launch crypto on hold.

The digital investment and savings app is one of the original UK fintech success stories. Founded in 2015, and launched in 2016, it brought ’round ups’ to the UK. A feature developed by Acorns in the US, which served as a highly successful ‘wedge’ product that allowed it to expand into a one-stop shop for pensions, ISAs, cash savings and more.

Therefore, when it was revealed – exclusively by AltFi – Last year in April that it planned to launch a crypto product, it did not come as a surprise.

However, not long after crypto began to face an ongoing period of existential crisis, initially dubbed as just another “crypto winter” but eventually snowballing to bring down one of the largest fintech platforms in the world FTX.

Money box, which counts approx. 1 million people as customers are now “down-prioritizing” their crypto launch.

Ben Stanway, CEO and co-founder of Moneybox, told AltFi in an email that the ongoing volatility in crypto markets over the past year made it less attractive.

“Over the past 12 months, significant market volatility has impacted how consumers choose to invest their money, and while crypto remains an option on our product roadmap, its integration into the Moneybox investment proposition has been de-prioritised,” he said.

“At Moneybox, we are committed to helping people build and grow wealth throughout their lives, and most recently, our focus has been on helping our clients make progress toward their financial goals while navigating changing market conditions with greater confidence, ” he added.

The company, which has around 300 employees, appeared to have continued to support crypto last September when it provided evidence to a UK government consultation on the future of crypto regulations.

“Moneybox strongly believes that regulation will significantly benefit providers and consumers of cryptoassets. Interest in this asset class is growing, and rather than being a niche investment for hobbyists, cryptoassets can have a place in a diversified investment portfolio, provided they are subject to regulation in the same way as other high-risk investment classes, as this will help protect the consumer from the potential volatility of cryptocurrency,” the company said in its written submission.

Moneybox had revealed its plans for crypto investment soon after raising a £35m Series D round. A few weeks later, this figure was extended by a further £4.9m via a crowdfunding round supported by retail investors on Crowdcube.

Central to the increase was a plan to launch its first financial planning service, expand its range of ETFs, as well as introduce crypto investing, Stanway told AltFi at the time of the first phase of the round when the story broke.

“We are going to expand [into crypto] through the lens of diversification, not through the lens of speculation,” he said, later clarifying to give “a couple of percent” in Bitcoin as part of a larger portfolio.

“So very much like long-term financial well-being, and diversification-oriented. If clients want to buy today and sell tomorrow, there are a lot of platforms out there that will facilitate that,” he said.

“We don’t want to be a good place for people to speculate on cryptocurrencies,” Stanway said.

While not going so far as to say that the company is ruling out crypto launch in the future, Stanway has highlighted how quickly things have changed in the crypto world compared to this time last year.

Boom and bust

Crypto’s skyrocketing prices went largely unnoticed by most people until the pandemic. It was in later 2020 and through 2021 that things changed.

The price of Bitcoin jumped 600 percent in the five months between October 2020 and March 2021, only to crash spectacularly in the following three months. The summer brought another run as investors piled into cryptoassets excited by the potential of the metaverse and web3 and continued interest from institutional investors.

The likes of Tesla had announced that they had acquired $1.5 billion in Bitcoin for example and wanted to accept it as a form of payment, which has yet to materialize.

Around this time, many firms in the fintech world that had largely stayed away from crypto announced plans to launch crypto offerings. These include Scalable Capital, Nubank, Curve, Plum, N26 and Lydia.

This was made easier by several fintech infrastructure companies launching to help fintechs quickly launch crypto products. Bitpanda, originally a crypto platform that later moved more into traditional areas such as stock trading, launched a dedicated B2B arm that operated both Plum and N26’s crypto products, for example.

This wave of activity coincided with a growing number of crypto scandals such as Luna, Three Arrows Genesis and of course FTX.

It is this change in market conditions that is central to the question of whether ‘crypto is (still) table stakes’ for fintech.

“Our investment proposition is designed to help people easily build a diversified portfolio, optimized for long-term wealth generation along with the flexibility to adapt to personal interests and values,” Stanway said AltFi this week.

“Despite recent turbulence in the markets, Moneybox consumer research has shown that consumer confidence in investing is increasing and Moneybox investment customers have chosen to invest 37 per cent more year-on-year,” he added.

There is clearly big money to be made from crypto. That much is obvious. But with a scarier market than a year ago, at least for Moneybox, opportunities lie elsewhere. For the time being anyway.