Circle launches a Coinbase competitor in the U.S.

Circle is launching Circle Invest in the U.S. except in NY, MN, HI and WY. The app is now available in the App Store and Play Store and lets you instantly trade the most popular cryptocurrencies without any fee.

Circle Invest isn’t exactly an exchange as the app hides most of the complexities that you can find on full-fledged exchanges. You can’t submit limit orders or look at the order book. You can only deposit and withdraw money, buy and sell cryptocurrencies at market prices.

Circle Invest currently supports Bitcoin, Bitcoin Cash, Ethereum, Ethereum Classic and Litecoin. The company will need to overcome some regulatory challenges to roll out its product in the last four states.

In other words, Circle Invest is more like Coinbase — a simple service that lets you buy cryptocurrencies without any complex option. But the main difference with Circle Invest is that the new service doesn’t have any fee.

ACH transfers from your bank account to your Coinbase are free, but exchanging USD on your Coinbase account into a cryptocurrency costs 1.49 percent.

On Circle, ACH transfers are also free, and you can start buying cryptocurrencies instantly for transfers below $10,000. If you transfer more than that, you’ll have to wait a few days. After that, exchanging USD on your Circle account into cryptocurrencies is free.

But what about spread? Yes, the price is different if you buy or sell bitcoin (for instance). Circle doesn’t try to hide that and says you can expect a 1.5 to 2 percent spread between buy and sell price.

Just like on every stock market, nothing is free even if there isn’t any fee. Coinbase also says that you can expect a spread of 0 to 2 percent.

While most people already know Circle for its consumer-facing Circle Pay app, the company operates a trading desk called Circle Trade. This product connects to multiple exchanges and provides liquidity to those exchanges and large cryptocurrency investors.

According to a recent Fortune report, Circle Trade manages $2 billion a month in transactions and recently generated $60 million in revenue in just three months.

And this is key to understanding Circle’s strategy. The company also acquired Poloniex and will launch its own full-fledged exchange soon. All of those products are powered by the company’s own over-the-counter trading desk.

While companies like Robinhood or Revolut also promise zero-fee cryptocurrency trading, they don’t have their own exchange. They only act as a broker with other exchanges. Circle is slowly building a full-stack blockchain company, from the trading desk to the peer-to-peer payment app in fiat currencies.

Disclosure: I own small amounts of various cryptocurrencies.