Today we talk to EXMO CEO Serhii Zhdanov, EXMO is a Crypto Exchange founded in 2014, the company is now based in the UK, Ukraine, Poland, Lithuania, and the US. The EXMO cryptocurrency platform has more than 24,000 active daily traders, more than 180 trading pairs, and an exchange token EXMO Coin (EXM), and operates with 6+ fiat currencies.
The average daily trading volume at EXMO is over $200 million, so we count on Serhii to know the direction and strength of the crypto market. Here is what he had to say:
Response from Serhii Zhdanov, CEO of EXMO
1. Why are institutional investors sinking more money into crypto despite the uncertainties that are surrounding the market currently?
Today, investing in cryptocurrency projects is an opportunity to invest in a new Amazon or Google at an early stage of development, since the entire blockchain industry is still in its infancy. All projects are at various stages of development and strive to offer the best solutions to the main challenges of the cryptocurrency sphere. However, there are no clear leaders yet. Successful projects that will meet investors’ expectations are going to be the foundation for the development of a new space that includes Web3 and metaverses.
The global trend for going online has intensified since 2022. Obviously, this process will continue regardless of economic crises. I see cryptocurrencies as an integral part of this phenomenon since they eliminate the limitations of the modern financial system while maintaining a reliable level of security. Thus, institutional investments in cryptocurrencies reflect a larger process of shaping the future, including a new financial system.
Another factor that contributes to the inflow of institutional capital is the increase in the number of banks providing cryptocurrency services to institutional clients. We’ve been seeing this trend, even amid the recent market downgrade. In fact, the infrastructure necessary for institutionalists’ work with cryptocurrencies is developing now.
2. Can regulation help Bitcoin decouple from the global stock markets?
Yes, it is indeed possible, and not just for bitcoin, but for all cryptocurrencies. This may happen due to the removal of existing regulatory restrictions for cryptocurrency adoption and integration into real economic processes. Due to this, the dependence of the crypto market on speculative capital should decrease significantly.
What’s more, regulation could lead to alternative cryptocurrencies eventually overtaking bitcoin with more use cases beyond payment.
3. What are the other functions of crypto beyond modes of payments?
Cryptocurrency and blockchain projects already offer solutions for the implementation of all existing financial services at a new level. They practically take over the functions of banks, payment systems, trading platforms, and universal marketplaces. In the future, on their basis, it is possible to build a new financial system, with improved accessibility, flexibility, transparency, and speed. In addition, blockchain technologies can solve problems like corruption and bureaucracy.
Cryptocurrencies serve as a bridge between the physical and the virtual world, through the tokenization of assets in the form of non-fungible tokens (NFTs), stablecoins, and other tokens tied
to metals, precious stones, securities from traditional financial markets, anything that can be of value. Recently, there have been reports of various distinguished corporations and organizations planning for asset tokenization, including Samsung Securities and the Australian Securities Exchange (ASX).
On the other hand, cryptocurrencies are a more flexible tool for expressing the value of intangible objects, like achievements in science and art, items in computer games, or lands in virtual reality. This property can also contribute to the simplification and acceleration of the interaction of various spheres of human life.
4. Can Crypto survive and thrive without blockchain?
The very name “cryptocurrencies” suggests that they are created with cryptographic methods, in essence, data encryption for secure exchange. The blockchain, which facilitates such encryption, is the most common “base” for cryptocurrencies – perhaps 99.9% of all coins and tokens have been issued there.
However, there are other methods, including directed acyclic graphs and consensus ledgers. The most famous non-blockchain cryptocurrency is XRP (formerly Ripple).
Cryptocurrencies belong to a broader class. That is digital currencies that can be issued without the use of cryptographic methods at all. For instance, some states consider issuing CBDC without using blockchain.
In fact, the digital money that does not use cryptography does not have the functions that are typical for cryptocurrencies. Therefore, it is absurd to talk about the possibility of cryptocurrencies’ existence without blockchain (or another method of cryptography).
5. Does the Crypto market have a chance to bounce back despite the threat of a global recession?
Cryptocurrencies were originally conceived as a replacement for the existing financial system. How feasible this is should be considered in the context of regulation in each particular country. In any case, this is a rather lengthy process.
However, even in previous years, we observed how in countries with high inflation, residents bought cryptocurrencies in order to save their funds. Among the most famous examples are Turkey, Venezuela, and Argentina. Today, the worsening global inflation may further boost the trend of buying cryptocurrencies. The spread of cryptocurrencies among the population will further lead to an increase in their use as a means of payment.
These processes seem to be the main factor leading to a new period of growth in the crypto market. However, we may see a new bottom before that, as such implementation needs time.
6. What do exchanges have to do to mitigate hacking risks?
The security of a cryptocurrency exchange includes a complex set of measures at all levels, which are maintained on an ongoing basis. For instance, exchanges may conduct periodical technical audits to identify potential threats.
Exchanges usually store most of their cryptocurrency funds in cold wallets, which minimizes losses in the event of a successful attack. Typically, for risk-control purposes, the amount of funds remaining in hot wallets is set to meet the needs for deposit and withdrawal operations.
In addition, some exchanges run bounty programs that encourage participants to look for vulnerabilities.
7. What is the best way to manage risks while investing in crypto?
Always do your own research before investing, don’t rely only on someone else’s opinion.
Refrain from hasty investment decisions based on FOMO.
Diversify your portfolio by investing in different projects. Consider the prospects of different areas of the industry.
A skyrocketing price is not a guarantee that the project will be able to survive in the long run. Consider the potential of the project, the prospects of the product, as well as the reliability of the team, and the transparency of their work.
Aside from buying and holding cryptocurrencies, there are various additional ways to generate passive income. In particular, staking, which is available in most crypto exchanges.
Store your cryptocurrencies in a safe place. The best solution would be a reliable cold wallet. Always be exploring other security recommendations.
8. Which are the best strategies for crypto trading?
There is no such thing as a universally best strategy. The choice of strategies depends on each trader’s level of experience, the amount of time available for trading, and the level of risk tolerance.
9. What is the future of crypto considering it is yet to decouple from the traditional markets?
Indeed, cryptocurrencies’ dependence on traditional finance will gradually reduce, but, on the contrary, there will be more interactions between crypto and the real sectors of the economy.
The current state of the crypto market and the decline in its capitalization and liquidity reflect only the current mood.
There’s another trend we can identify by researching active venture investments in the sector – large corporations’ increasing involvement in cryptocurrencies, including payment companies, banks, audit companies, social platforms, and tech giants.