Newcomers are strengthening their positions in the financial markets: the crypto currencies are taking their places among the products of broker companies and in portfolios of investors and speculators. What is going on in the market of Bitcoin and Ethereum, can a classic trader profit on that and how to open your crypto business, comments Artur Azizov, B2Broker CEO.
How can you assess the current crypto market environment?
In the market of money there is nothing less than a revolution. Now, when both supply and demand on crypto currencies have appeared, a new market was born. And there is great turmoil in store. If you translate it into the language of money, this is the tool which you can profit on right now, without even going into discussions about its mission and significance. According to my forecasts, Bitcoin can overcome the threshold of $10,000 over the next year. It’s irrational to sit on the sidelines and watch how others make money on it.
Is there a significant difference between the trading crypto currency and traditional assets- currency pairs, stocks, and futures?
On the one hand, it seems to be not: the same technical analysis is applicable to the instruments of the crypto currency market. On the other hand, the market is completely new. There are millions of factors affecting it, especially technological ones. Very few people understand the essence from the roof to the ceiling. And so far there is much to be explored. Or the authorities will begin to regulate the sphere tightly. Remember the events of the late June this year: the rate of the Ethereum fell sharply on a false report of the death of Vitalik Buterin, the creator of the crypto currency. During the day Ethereum lost about 15%. What should happen in the traditional market, for us to see a similar drop or rise, shown by Bitcoin right now? A war?
And yet, what is the reason of crypto currency boom? Don’t you think another bubble is ready to burst in the market?
Let’s talk about numbers. The capitalization of the derivatives market, including forex, forward, CFD is $ 1.2 trillion. Crypto currency capitalization has a long way to go to reach the numbers. Sure enough, some projects will be closed, someone will lose money, someone will earn. We need to understand the key point – this is a new world, new technologies, new exchanges and new money. And you cannot escape from this. No matter how you call it – bubble, hysteria, hype, or something else.
How do you see the market prospects – what to expect in the nearest future?
No doubt, the market will grow further. We expect a threefold increase in trading volumes before the end of the year. Given the number of new ICOs that are taking place now and are scheduled for this fall (and among them there are also quite large ones), of course there will be new tokens and new currencies. The growing popularity of the market and the potential for its growth will attract new participants here. In the nearest future, we should expect the beginning of the market legalization in Western countries and further spread of blockchain technology. It will penetrate into all spheres of our life, from shopping to travelling.
In the financial segment, crypto exchanges will keep coming to light, and brokers will finally pay more attention to this market.
An important element of the whole cryptosystem is crypto exchanges. The recent problems associated with the BTC-E shut down, revealed many problems related to the security of client tools. Is the emergence of new exchanges has the potential in such environment?
The currency exchange is intended for the physical purchase and sale of crypto currency. That is, if you have dollars on the E-wallet, you can change them to Bitcoins, and Bitcoins to Ethereum, and so on.
The emergence of new exchanges is quite important. This is a healthy competition, the development of the industry, the movement towards greater transparency. Restaurants continue to open, although there are already a lot of them. There is plenty of demand for all participants. If we consider this from the business point of view, there are about 200 stock exchanges in the world. And there are about six thousand forex brokers. What looks more promising?
You will have to compete anyway and in any business. It’s important what technologies you give, what services you provide, how well you conduct your business to protect your customers from difficult situations.
If you decided to join crypto business, how to choose a reliable provider of such solutions? What are the key criteria when making your choice?
Look at the offered technology and the past experience in this area. Also consider if you get enough attention to you as a customer. We faced an interesting case. Recently, one of the major liquidity providers announced the launch of crypto currency products. The next day, several companies came to us to get crypto products. We asked “Why you chose us?”. The answer was simple: “They are too big, therefore, firstly, they are too expensive, and secondly they have already ruined their reputation, and you have unspotted name.”
Communicate with colleagues, attend professional events. This way you will gather as much information about the work of possible providers as possible. Carefully monitor who and how fulfills the tasks similar to yours, for you not to get obsolete technologies as a solution.