Yoni Assia, the CEO of major multi-asset trading platform eToro, has said that the correction of Bitcoin is positive for the long-term health and growth of the crypto market.Throughout August, Bitcoin recorded its third major correction in 2018, as its price fell from $8,500 to $5,850. But, shortly after dipping below the important $6,000 support level, the dominant cryptocurrency recovered relatively quickly to mid-$6,000.1-day Bitcoin price chart, provided by Cryptowat.chDemand For Bitcoin Has Not DeclinedIn an exclusive interview with NewsBTC, Assia, who oversees one of the biggest online trading platforms in the global finance sector with more than 8 million users, said that market correction was necessary in order for the crypto market and industry to mature, establishing a foundation for future rallies.He emphasized that the demand for Bitcoin and cryptocurrencies as an emerging asset class has not declined even after the 78 percent correction in the valuation of the crypto market. Assia said:“In our view, the recent market correction is good for the long-term development of the market. Cryptoassets are still a relatively nascent market; emerging technologies like this often see swings in their value in the early days. Market adjustments like those we have experienced recently help to stabilize prices, and make the industry more robust. Despite these adjustments, however, we have not seen a significant dip in demand for digital assets.”Crucially, Assia added that based on market data eToro obtained, the demand for Bitcoin will not slow down in the near future, as the crypto market continues to grow at exponential pace.“As the market matures, more investors are expanding their portfolios to include cryptos, while new investors are opening portfolios to trade crypto assets. We do not expect this demand to slow down any time soon, as more people recognize the potential of crypto assets,” Assia stated.Massive Improvements in Market StructureThe steep drop in the price of Bitcoin and other major digital assets such as Ethereum, Bitcoin Cash, and Ripple this month was unexpected by the vast majority of investors, particularly because of the emergence of significantly positive developments in the global cryptocurrency sector.In August, the New York Stock Exchange, Microsoft, and Starbucks formed an initiative called BAAKT to improve the usability and adoption of cryptocurrencies, the Japanese and South Korean governments disclosed their intent to strictly regulate cryptocurrency exchanges as regulated financial institutions, and the government of China has spent over $3 billion to finance blockchain startups.Yet, despite the inflows of positive news and events, the cryptocurrency market has shown a strong downtrend with lack of momentum.Some investors have speculated that the over-the-counter (OTC) market, which is said to be two to three times larger than the public cryptocurrency exchange market, caused the market to drop.Regardless, Assia explained that once regions with opaque policies regarding cryptocurrencies such as India clarify their stance on digital currencies as an asset class, the sector will see more positive and optimistic developments, inevitably pushing the price of major digital assets upwards.“The potential of blockchain technology is becoming increasingly clear to governments and financial institutions worldwide, as we have seen in recent attempts to incorporate this technology into their existing structures. We also know that institutional investors are waiting for regulatory clarity to move from the side-lines to the centre of the playing field. As we see developments move forward in these areas, we expect the price of Bitcoin and other cryptoassets to climb higher, though we may see some volatility as investors respond to short-term market news,” Assia told NewsBTC.
According to Zeeb, cryptocurrencies are really “not a priority” at the moment, taking into account the fact that there are a number of other platforms that provide Bitcoin (BTC) trading services. Moreover, Zeeb noted that there are still some “reputational” issues surrounding Bitcoin, also suggesting that Bitcoin is all about “hope and hype.”
However, the head of securities services at top Switzerland’s stock exchange expressed optimism about the concept of digital assets. Zeeb stated that digitals coins such as Initial Coin Offering (ICO) tokens are “here to stay,” with its mass adoption coming in around “five years.”
In the interview with Business Insider, Zeeb compared digital currencies with derivatives trading, claiming that he is “absolutely convinced” that crypto is “where derivatives were in the early ’90s.” According to Zeeb, digital assets’ adoption will come “a lot faster than the 30 years it’s taken derivatives.”
Zeeb said that the upcoming digital assets exchange — currently being developed by SIX — aims to introduce a regulation-focused way of trading ICO tokens in order to enable participation by institutional investors.
He stressed that that the main task of the exchange would be filling the gap between crowdfunding and ICOs, which is now usually taken up by venture capital or private equity. Zeeb stated,
“There is demand from institutional clients to find a way to legitimize and bring asset safety into play.”
Speaking to Business Insider, Zeeb encouraged the digitization of existing securities or exchange-traded funds due to the ability to enable fractional ownership, citing the benefits of turning some exotic assets such as art galleries collections to tokens.
Later in July, SIX also revealed it has started considering the possibility of launching crypto trading services on its trading platform, which is set to be launched by mid-2019.
The report, titled “Crypto Trading — the Next Big Thing is Here?,” argues that the protracted crypto bear market is unlikely to impact the burgeoning revenue generated by exchanges.
Moreover, “as the crypto-asset class seasons and institutional demand builds,” traditional financial sector firms — including custodians and asset managers — will find “a plethora of opportunities,” the analysts suggest.
Bernstein found that in 2017, the buying and selling of cryptocurrencies generated $1.8 billion in transaction fees alone — equivalent to eight percent of the revenue of traditional exchanges. On the basis of the analysts’ findings, Bloomberg notes that “in terms of segments, only the global cash equities business surpassed crypto trading.”
How cryptocurrencies’ average daily traded volume over 30 days compares with major traditional segments. Source: Sanford C. Bernstein note citing CoinMarketCap, CBOE, Coindance, SIFMA, as cited by Bloomberg
The analysts note that the mainstream financial sector has been wary of entering crypto spot markets amid regulatory uncertainty and market volatility that besets the nascent industry.
They add that Wall Street’s circumspection risks that in the U.S., major crypto exchange and wallet provider Coinbase could end up with an “unassailable competitive position.” The analysts estimate that Coinbase boasts a whopping 50 percent of the transaction revenue pool.
As Cointelegraph reported earlier this week, Coinbase CEO Brian Armstrong has said that the exchange was signing up 50,000 users per day in 2017, helping customers to trade $150 billion worth in crypto that year.