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Natalie Gavrilenko from The Conference.Exchanges: Interview with Bitstamp

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The long-awaited The Conference.Exchanges will take place on March 5, 2021, in which leading crypto CEX & DEX, DeFi projects, traders, liquidity providers, and regulators will take part. The event will be online only.

Agenda of The Conference.Exchanges DeFi.Edition:

  • DeFi;
  • Crypto Market in 2021;
  • Security;
  • DEX vs CEX;
  • Trading strategies; 
  • Regulation & legal issues.

This is already a traditional event, which is being held for the third year in a row. The first conference was held in Singapore in November 2019, the second in March 2020, and the third is scheduled for early March 2021!

Conference Director Natalie Gavrilenko spoke with representatives of the Bitstamp cryptocurrency exchange, a partner and main sponsor of the event. Representatives of one of the oldest European exchanges commented on the hottest topics from the cryptocurrency world and shared their plans for the future.

I am glad that you are with us today and that you are sponsoring the event. We met last year in Amsterdam, but the crypto market has changed a lot since then. How is Bitstamp doing during the crypto rally?

— In a word: amazing. I don’t think any major crypto exchange could say anything different right now. The volumes we’re seeing are already far above the peak of the crypto rush in 2017/18. Back then, Bitstamp’s highest daily volume came just short of $2B. This time around, we’re peaking at around $3 B in daily volumes. At the same time, it’s clear this is just the beginning of the next bullish cycle, so it’s looking like an exciting few years ahead.  

But looking beyond just the volumes, I’m especially happy that we were once again able to prove Bitstamp is the most stable and reliable exchange during demand spikes. We’ve had zero downtime so far in 2021 and have been successfully scaling in stride with rising demand for all our services.

More recently, a sharp rise in bitcoin overwhelmed one of the largest exchanges. Now there is real madness on the market, and this will happen more than once. Is Bitstamp ready for abnormal trading volumes?

— The fact that we’re never down is something we take a lot of pride in. Our engineering team has basically been preparing for what’s happening now since the peak in 2018, strengthening every point in our infrastructure, including implementing a cutting-edge matching engine from Nasdaq last year. 

We’ve built a large level of redundancy into our systems, which of course comes at a cost, but we made a decision to prioritize the quality of service and reliability and dedicated a lot of our resources to that. So far, it’s paying off. 

It seems that this time around, the growth of the market is driven mostly by institutional investors as opposed to the retail market. Is that what you’re seeing on your end? What are your thoughts on this shift, compared to the last market cycle?

— The growth we’re seeing is a mix of both institutional and retail demand, but you’re correct in assessing that the institutional side has been more dominant this time around. We are definitely seeing retail demand pick up as well, but in terms of new signups at Bitstamp and the volumes generated from personal accounts, it’s still catching up to 2017/18 levels. But it’s not exactly a fair comparison, as institutional adoption is going through a sort of renaissance right now, with big names like Paul Tudor Jones and more recently Michael Saylor and Elon Musk sort of legitimizing the space, which seems to have opened the floodgates for institutions. The way I look at it is that the institutional space in crypto was underrepresented and is now making up for that gap, while retail has been strongly present in the space for years.

An important thing to note about these big treasury investments the likes of Tesla and MicroStrategy is that these are mostly bought and hold investments, meaning that the Bitcoin they’ve bought has been taken off the market. And, currently, MicroStrategy alone holds 0.5% of the total Bitcoin supply. What that means is reduced liquidity on the market, which leads to more volatile price action. As long as that action keeps moving upward, we can be pretty sure retail demand will continue to pick up both in scale and pace.

A few days ago, you announced the listing of DeFi tokens with reduced fees. What do you think about the potential of decentralized finance? How long will it take for the industry to mature to the level of classical blockchain startups?

— Well, first I’d like to point out how amazing it is that we’re talking about “classical blockchain startups” and DeFi sort of being the new kids on the block. The way this space has evolved over just the past three years is mind-boggling and, right now, it seems that DeFi is where innovation is moving at the fastest pace. That’s not to say it’s creating more valuable solutions than other sectors of the crypto industry, but just the pace of innovation happening in DeFi right now is staggering. 

The potential of the space is practically limitless and I think we’re still far from discovering how DeFi is going to change finance – definitely on a personal level, but potentially even on the corporate level. However, we’re still years out from DeFi being adopted by institutional investors and traditional finance, the way we’re seeing it with Bitcoin today. It may not even come to that at all and perhaps it doesn’t need to and the future of DeFi will be mostly about retail flow and managing personal finances. It’s still too early to tell.

What are your expectations from the crypto market? What are your plans for this year? Perhaps you are going to launch new trading formats? DEX, margin, or p2p?

 — Any expectations we’ve had over the past few years have consistently been blown away by the market. So let’s hope that trend continues and the growth of this industry, from an adoption, trading, and innovation standpoint continues to surprise us. In terms of our plans at Bitstamp, we will continue to first and foremost focus on being the best and most reliable crypto spot market along with all the complementary services that come along with that. But I will say that we’ve got a few nice upgrades and new product launches up our sleeve for later in the year, though I can’t get into more details just yet.

You can join The Conference.Exchanges DeFi. Edition Online Event and get some of the industry’s top professionals’ experience for free! All you have to do is register here.

Disclaimer: This is a paid post and should not be considered as news/advice.

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Having studied Chemical Engineering, Akashnath's focus is on the UK and Indian markets and especially crypto assets. He is devoted to technical analysis and is always on the lookout for investment opportunities.