As Kriptokoin.com, we conducted a written interview with BitMEX CEO Stephan Lutz to get information about investors’ questions and the future of the crypto money market.
The tough bear market we experienced in 2022 has tested the resilience of many cryptocurrency investors and industry components. The second half of last year became even more frustrating with the bankruptcy of various organizations operating in the sector. In 2023, we witnessed some recovery in Bitcoin and most altcoins.
While the prices of the tokens traded in the market rose, especially the crypto currency miners slightly corrected their balance sheets. In the January-August period, the main focus of the crypto market was on country and regional regulations rather than projects and initiatives.
Lutz, head of financial affairs at the well-established exchange; answered questions about his career, BitMEX and other exchanges, and shared his predictions about the future of the industry. The full version of our written interview with Stephan Lutz in the form of questions and answers is as follows:
It stands out in your career story that you don’t have a long history with the crypto industry. When did your interest in cryptocurrency and blockchain begin? What drove you to this field?
During my days at PwC, I became interested in the enormous and transformative potential of blockchain technology and cryptocurrencies. Thanks to my finance background, I realized the opportunity of technology to revolutionize traditional finance. 10 years ago there were many players who worked hard to discover this new technology.
I contacted the BitMEX team looking for someone for the Finance Director position and was then appointed CEO.
What role do trading platforms play in the evolution of cryptocurrency and blockchain technology?
Cryptocurrency exchanges provided liquidity to the market, making it easier for investors to access the market. This function leads to wider adoption of crypto in the long run. Thanks to the altcoins listed by the exchanges, investors are informed about new projects. Funds flowing from investors to projects encourage developers to innovate.
Crypto trading platforms play a pivotal role in connecting traditional finance and the crypto world. Crypto derivatives products offered on trading platforms such as BitMEX are great examples of how innovative products familiar to traditional investors can increase adoption and improve market liquidity, resulting in the growth and development of the ecosystem.
The increase in the number of institutional investors led countries to pay more attention to the regulations. In this way, important trading platforms such as BitMEX play an important role in shaping the law. As BitMEX, we are working to grow the sector while complying with local and national regulations.
Investor behavior on trading platforms provides valuable data on trends for service providers, informing market sentiment and feedback. These insights and activities contribute to the overall technological development, development, security and scalability of blockchain technology.
Finally, cryptocurrency exchanges have models that can grow in both bear and bull markets. Companies use the revenues they earn for the realization of new initiatives and innovations in the industry. Individuals are encouraged to invest by receiving training in the field of blockchain.
From the beginning of the year, governments in many parts of the world pressed the button for regulations. Some of the industry and investors support these moves. Opponents, on the other hand, think that the regulations go against the nature of cryptocurrencies. What is your comment on that?
As BitMEX, we are committed to complying with all applicable regulations and working together to help shape the future of this rapidly developing market. As a platform with an authentication process, we believe regulations are a positive development for the crypto industry. Clear industry laws have the function of protecting both the trading platform and investors. Thus – it will increase market confidence in the industry and asset class while promoting individual and corporate adoption with a secure trading environment.
For example, under the new virtual asset regulatory framework in Hong Kong, service providers are required to keep 98% of customer assets in cold storage and ensure that at least 50% of those assets are insured. These measures will prevent us from experiencing another FTX debacle by promoting safe investment. Regulations can create a stable and reliable environment for the industry to grow and mature. This can give regions an advantage over jurisdictions, with policy-making fragmented across states or countries.
How are crypto exchanges adapting to multiple regions as governments’ regulatory efforts continue? What are the most challenging issues for international cryptocurrency exchanges against states?
Adapting to different regulatory frameworks in multiple regions is a challenge for international crypto exchanges. It is very important to us that the laws be clear – especially in the USA.
Unclear regulations create an atmosphere of uncertainty for investors. As BitMEX, we are trying to get licenses in various countries and regions. BitMEX is registered in Italy, but our brokerage service, BMX Link AG, is a member of the Swiss Financial Services Association (VQF), an officially recognized self-regulatory organization. BMX is licensed by the Swiss Financial Market Supervisory Authority (FINMA).
The cryptocurrency market has had a tough 2022. Although we saw a slight increase in prices in the first half of the new year, it seems that investors are not satisfied. Can investors smile for the rest of 2023?
We cannot predict the future of the cryptocurrency market, but there are many reasons to be optimistic about the growth of the industry next year. Avoiding the market crashes caused by the FTX and Terra Luna events is very important for investor confidence and market stability. Regulatory moves by governments after what has happened in the past make such events less likely.
The final verdict from the Ripple (XRP) lawsuit and the upcoming Bitcoin Halving for 2024 are positive developments that could boost demand and stabilize the market. These developments offer hope for a more stable and stable cryptocurrency market after the challenges faced in 2022. Overall, there are many reasons to be optimistic about the cryptocurrency market in 2023 and beyond. The increasing adoption of cryptocurrencies by institutional investors and large corporations is also significant.
Cryptocurrency exchanges may experience connection problems. What kind of precautions do you take as BitMEX in this regard?
This issue is of great importance in fast-moving markets such as cryptocurrencies. We provide real-time data to inform our customers about trades and price changes. For a fair trading environment, we take every precaution to avoid possible price manipulations due to connectivity issues.
Our Stop-Order feature in the trading section helps traders not to miss a trade. Traders do not have to spend hours in front of the screen by predetermining the price at which they will trade. The BitMEX ecosystem has live customer support, regular updates and maintenance, as well as a robust offline and online infrastructure where we can manage large trading volumes. We are one of the most reliable exchanges in the industry. In these cases, our track record is cleaner than our competitors. In the last 18 months, we have invested significantly in further improving the performance and speed of the platform.
What kind of tools do you offer as a BitMEX exchange for investors to earn extra income?
As BitMEX, we develop various products and tools for our customers to earn extra profit. However, I would like to underline that for us, customer safety comes first. We work on products that can help our investors succeed.
We recently launched a social trading feature called Guilds, which allows traders to collaborate with others and earn rewards. In less than a month, more than 320 traders showed interest in the Guilds product with over $400 million in transaction volume. We have also recently revised our affiliate program so that famous investors with large audiences can earn up to 45% commission income.
Some major cryptocurrency exchanges list dozens of altcoins per day. However, BitMEX acts more calmly in these matters. What do you pay attention to when listing cryptocurrencies?
The safety of investors is the most important factor for us. When a cryptocurrency project is presented to us or comes to our attention, our team delves into it. Therefore, we are selective in the altcoin listing process.
To list a derivative, we pay attention to the fact that there is no risk of price manipulation between the spot and derivatives market and listings from other major exchanges.
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