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Report on Business Q&A: Cryptocurrency pioneer advises HODL: ‘hold on for dear life’

Cole Diamond's timing was perfect.

He had heard about virtual currencies in 2016 and wanted to buy some. He found the process arduous, and therein saw an opportunity.

Months later he invested in Coinsquare, a digital currency trading platform, and became its chief executive officer. Over the next year, the price of bitcoin rose nearly 2,000 per cent, and Coinsquare’s revenue soared. The company has raised more than $50-million in equity financing from investors.

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The price of bitcoin has dropped since then, but Coinsquare has continued growing. Even so, Mr. Diamond manages to get home in time to see his young son off to bed.

He was interviewed for I’ll Go First, a new podcast series about entrepreneurs produced by The Globe and Mail.

The price of bitcoin has dropped, but Cole Diamond's company has continued growing.

Christopher Katsarov/Globe and Mail

Canada has a lot of digital currency companies. How is yours different?

We view ourselves not as a digital currency trading platform really anymore. We view ourselves as a 21st-century financial institution. So we believe that with the power of blockchain technology we can start bringing more financial services to our customers. We’ve launched an asset-management business. We think we can start to attract a more diversified portfolio of customers as well as a more diversified portfolio of assets outside of just cryptocurrency.

Can you break down what blockchain is and what cryptocurrency is?

Blockchain and cryptocurrencies were created at the exact same time, and that was with the creation of bitcoin. You have a computer, and I have a computer, and your friend has a computer, and all these computers around the world are speaking to each other. What they’re doing is confirming that one machine says the same thing that another machine says.

What's beautiful about that is that we don't actually have to trust each other if we're gonna work on the blockchain. I don't have to trust an intermediary or worry that my assets ended up in the wrong place.

Somebody – we don’t know who – named Satoshi Nakamoto created bitcoin. He or she – or they or whoever Satoshi is – was trying to figure out how to create a structure for currency that lived outside of central banks. It could be a stronger currency than what are called fiat currencies – the Canadian dollar, the U.S. dollar, etc. – and at the same time it was considered to be incredibly more efficient than regular currency because it could move significantly faster and it could be tracked. Those are some of the reasons for why it got a lot of interest and a lot of early adoption.

Bitcoin is one of the digital currencies that Coinsquare trades in.

Dado Ruvic/Reuters

What cryptocurrencies are you invested in?

That’s a fantastic question. And I don’t share that with anyone. Coinsquare is not in a position to give investment advice. What I would love to tell you is our position on the market instead.

My suggestion to people is to pick a basket of options – not one or two but three or four or five. And hold them. Or in our market we say HODL – hold on for dear life. Don’t look at the price today. Don’t look at the price in six months from now. Don’t try and make a quick buck. Buy it and hold it. If you can’t afford to lose the money you’re putting into this asset class, then don’t even try. I believe very strongly the market will not just survive, but it will thrive.

How long is your day?

Well, this morning I got started about 5:15 and I’ll be in meetings most of the way through until I see my 16-month-old son around 6. Then I’ll probably get back at it after dinner and go to bed at 10, because life is not overly exciting on the social side, but it’s very exciting on the business side.

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Has being a dad made you a better entrepreneur or a better boss? Has it changed your outlook?

I wouldn’t say that it’s changed too much about my business outlook, but it has changed a lot about how I deal with business. I try to be home almost every day for bedtime. The CEO of the company walking out the door at 5:30 is not the most positive effect on culture. But I’m doing it for all the right reasons, and I hope my staff respects that.

Coinsquare has grown fast. What is it like to work hard to build something you didn’t create?

I’m a creator, so that’s been challenging for me. The initial infrastructure of a business might be the founder’s baby. But then you start to share the child, so I like to refer to myself as the stepdad of Coinsquare. I kind of needed to have my own things, so we launched Coinsquare Mining, which is a majority-owned subsidiary of Coinsquare, in partnership with a couple of other guys. We’ve built it into an absolutely enormous business, and I get to call that my baby.

What is your greatest fear?

Stronger competition.

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What do you do for fun?

Swimming with my son.

What motivates you?

Winning.

What's your perfect day off?

Lots and lots of walking.

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How many hours do you sleep at night?

Six and a half.

What’s the one word your friends would use to describe you?

Aggressive.

What’s your favourite TV show?

Probably still 24.

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Since he was 18, Mr. Diamond has dreamed of running a hotel.

Christopher Katsarov/Globe and Mail

Name one big mistake that has helped to define your career.

I come from a sort of long line of entrepreneurs, and the strong advice given to me was to go out and make my mistakes on someone else’s dime. Not go and start my own businesses right away. And I didn’t listen.

I had a quick win from one, and then a massive fail from another that resulted in me losing money, investors losing money. But the learning experience was unbelievable.

If you had to provide your younger self with one piece of advice, what would it be?

I would go back and tell him to finish university. It wouldn’t have made that big of a difference given my career choice. But at the same time, I could have had a fantastic experience and made stronger friendships, and you’re always in a better position to do that at school than you are at work. And then I wouldn’t be embarrassed every time I go to LinkedIn and look at my profile that says, like, ‘King’s College, one year.’

What do you see for yourself in the future?

The story hasn’t changed since I was 18 years old. My dream is to build, own and operate my own hotel. Hotels are my thing. God willing, I’m the concierge of that hotel and I’ll wear one of those stupid hats. People coming in will be trying to make the best out of whatever day it is, and to be able to contribute value to people in that regard would be exciting for me. Outside of my grandfather, the guy that I’ve always looked up to in business is Issy Sharp, the founder of the Four Seasons. What he’s done with that business has been unbelievable to watch, and God willing I can mirror that. Although at that stage in my career, if I have the flexibility to open a hotel, I’m not going to want multiple locations. I’m going to want the one, and that one will be the best in the world.

About Coinsquare

Headquarters: Toronto

In business since: 2014

Employees: 140

Annual revenue: Not available

Want to get into cryptocurrency but not sure how or where to start? Toronto-based Coinsquare Ltd. gives Canadians a secure place online to buy and sell digital currencies.

Since its launch four years ago, Coinsquare has grown into one of the country’s largest digital-currency exchanges and is among the top 100 worldwide, according to CoinMarketCap, a website that tracks cryptocurrencies and exchanges. Using their computers or phones, Coinsquare users can buy and trade up to seven types of digital currency, including bitcoin, ethereum and ripple.

Chief executive officer Cole Diamond declined to give the total number of Coinsquare users, saying only there are “several hundred thousand – all Canadian.” There’s plenty of room for growth in the digital currencies market, he adds. Indeed, a Bank of Canada survey found an increasing awareness and ownership of digital currency among Canadians: Last year, 85 per cent said they knew about bitcoin, compared with just 64 per cent in 2016.

Mr. Diamond notes that Coinsquare is more than a trading platform. The company has six lines of business, including mining, asset management and licensing of its cryptocurrency trading-platform technology.

Coinsquare is set to launch in Europe this year, a move that will significantly expand the company’s market opportunity, says Mr. Diamond.

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