Cryptocurrency analyst. Founder and editor at btcpeers.com
The crypto industry is currently in a critical growth phase fueled by the influx of institutional traders and intensified engagement with crypto assets. This budding crypto era, connoted by the price rally of digital assets and the explosion of DeFI protocols, coincides with a period of increased uncertainty in a majority of traditional markets. Experts believe that the unbridled spending of governments in the guise of economic relief programs could lead to a catastrophic end. As such, institutional investors are increasingly opting for cryptocurrencies and precious metals to hedge against inflation. According to a report by Fidelity Investments, 36% of the 774 institutional investors surveyed across Europe and America own cryptocurrencies or its derivatives.
Due to this high demand for digital assets, exchanges are back at the center of the crypto conversation. These entities are the de facto gateways of the crypto economy, and their performances would, to a large extent, play a part in crucial onboarding processes of institutional investors. Therefore, exchanges have begun to roll out products targeted at institutional traders. However, more often than not, this is not enough.
Per information from several crypto exchange representatives, institutional traders are currently favoring high-frequency trades. And so, they are more concerned with the fundamental principles of exchanges as regards speed, security, and compliance. For one, high liquidity is vital to execute such trades. Also, the volatility and the digital nature of cryptocurrency puts more pressure on exchanges to facilitate premium security infrastructures with advanced custodial and insurance features that are ideal for the safekeeping of users’ assets. And since institutional investors must comply with stringent regulatory frameworks, they expect the same of crypto exchanges.
In light of the evolving trends of the crypto industry and the added pressure it puts on exchanges, I decided to interview Vladimir Nosov, CEO of WhiteBIT exchange. The exchange recently introduced a margin trading terminal designed to provide more trading options and profit-amplifying opportunities to its expanding community of traders. In this interview, Vladimir Nosov revealed key fundamentals fueling the recent price rallies, explored the influx of institutional traders in the crypto market, and stressed its implication on the fragmented crypto exchange sector.
Andrey Sergeenkov: There is a lot of buzz surrounding Bitcoin’s recent price rally. What do you think is responsible for this?
Vladimir Nosov: I think the rally was long overdue. The stage has been set for wild price swing ever since investors and miners began to hold on to their stash despite the unimpressive short-term effects of Bitcoin halving. Subsequently, a string of events and developments made sure that a price uptrend was never in doubt. There was an increase in the market visibility of DeFi tokens, institutional investors began to ditch traditional assets for the more inflation-resistant Bitcoin, and regulators in the US greenlighted bank-enabled crypto custodial services. All these factors will have long-term effects on the price of Bitcoin, which is why the crypto community is excited about the coming months.
Andrey Sergeenkov: What does the increase in institutional traders mean for the crypto market at large?
Vladimir Nosov: This is an interesting development as it further establishes the validity of the crypto market. For as long as I can remember, the crypto space has been compared to a giant bubble waiting to pop. As such, the influx of institutional traders and investors give credence to the crypto movement and forces regulators to put more effort into addressing the regulatory debacles frustrating mainstream adoption.
Andrey Sergeenkov: Do you think that the increased involvement of institutional investors diminishes the influence of whales on price movements?
Vladimir Nosov: Yes, I do. It is common knowledge that the actions and inactions of whales often cause the price of crypto assets to swing wildly. In some cases, these entities try to capitalize on their market position and influence prices in their favor. However, with the advent of institutional trading, whales-inspired price fluctuations will become less frequent. This shows that the market is maturing.
Andrey Sergeenkov: What are your thoughts on the added pressure this development imposes on crypto exchanges?
Vladimir Nosov: Well, this is what the industry has always wanted. Mainstream adoption hinged on the capacity of crypto technology to attract institutional entities. Now that we are on the verge of achieving this goal, we should not be complaining about the challenges that come with it. I see this pressure as a good thing because it pushes us to improve our operations and develop more sophisticated trading systems.
Andrey Sergeenkov: How has the crypto exchange landscape adapted to the sharp rise in institutional trading?
Vladimir Nosov: Like I said earlier, it is advantageous to the crypto exchange sector. I believe that the influx of institutional engagements has kicked off new development cycles and increased competition. The trading infrastructures we have today are much better than what we had before. I expect these improvements to continue as more institutional traders enter the crypto landscape.
Andrey Sergeenkov: To get a detailed picture of the situation, how is WhiteBIT adapting to this evolving trend?
Vladimir Nosov: WhiteBIT prides itself as a hub of blockchain experts working together to enable a conducive healthy trading environment for crypto traders. The team currently consists of more than 100 blockchain specialists, with 65 of them having middle or senior level experience as a developer. And so, we have a pool of innovative minds ensuring that our trading infrastructure is flexible enough to meet the needs of retail and institutional traders. Hence, adapting has never been an issue.
Andrey Sergeenkov: Experts believe that security, speed, and compliance are three core challenges that could limit the increase in institutional interest in crypto assets. How true is this?
Vladimir Nosov: Institutional traders are currently looking to engage in high-frequency trading. Therefore, speed is one of the core criteria used to judge the suitability of exchanges. The same goes for compliance and security. And since a majority of trading platforms find it hard to establish a platform insusceptible to this three-pronged issue, there is more work to be done. Fortunately, exchanges like WhiteBIT have found a balance between enabling high security, providing speed, and implementing industry standards. This proves that it is possible to create an exchange infrastructure suitable for institutional trading.
Andrey Sergeenkov: How has WhiteBIT ensured that it provides high liquidity and speed?
Vladimir Nosov: WhiteBIT has all it takes to deliver a fast and seamless trading ecosystem. We have a community of 180,000 traders, with 35,000 of them engaging with the platform actively. Also, WhiteBIT prioritizes the incorporation of high liquidity fiat and cryptocurrencies pairs. Besides, our trading and matching engines are built with innovative technologies to provide instant deposits and withdrawals as well as fast order book performance.
Andrey Sergeenkov: What about security? What are the measures taken to ensure that your systems are unsusceptible to attacks?
Vladimir Nosov: WhiteBIT has not had a single case of security mishap since it launched in 2018 because we take extra care of our users’ private information and digital assets. We have combined bank-grade security systems and in-house developed tools to ensure that our platform is safe and resistant to attacks. We utilize anti-phishing and two-factor authentication software to protect users’ accounts and store 96% of digital assets in cold wallets. With all these, we can guarantee a secure exchange facility for both retail and institutional traders.
Andrey Sergeenkov: Compliance is a bit of a daunting task considering the nonuniformity of regulators' approach to cryptocurrency. How has WhiteBIT managed to establish a global presence and remain compliant?
Vladimir Nosov: At WhiteBIT, we take compliance very seriously and own European licenses validating our custodial and exchange operations. We have made sure that all our services meet the KYC and AML requirements of all the jurisdictions where we are currently available.
Andrey Sergeenkov: WhiteBIT recently announced the launch of its margin terminal. How does this play into your goal of enabling quality trading infrastructure for your target markets?
Vladimir Nosov: Our newly launched margin terminal gives us added advantage in the crypto landscape. Although WhiteBIT is globally available, we are primarily-focused on bridging the gap between the traditional and crypto financial terrain of Europe and the CIS countries. And despite the number of margin terminals operating currently, our new product will be the first of its kind in the CIS market. Therefore, the decision to launch a margin terminal of our own aligns with our goal of providing quality trading experience and options to crypto traders in our target markets.
Andrey Sergeenkov: What innovative edge does the margin terminal have over established players?
Vladimir Nosov: Apart from being the only marginal terminal targeting the CIS market, our offering comes with several mouthwatering features. We are looking to provide X25 leverage in the long run. However, for now, traders can access X5 leverage. Likewise, the terminal features high-liquidity fiat currencies, which include Ukrainian Hryvnia (UAH), Russian Ruble (RUB), Euro (EUR), and Turkish Lira (TL). We will pair these assets against top cryptocurrencies.
Andrey Sergeenkov: Should we expect to see the same level of transparency and security that WhiteBIT is known for in this new product?
Vladimir Nosov: WhiteBIT has maintained a transparent and secure business model since 2018, and without any doubt, the same level of proficiency will power our margin terminal. For us, the goal is to establish quality services, whether it is spot exchange or margin trading.
Andrey Sergeenkov: What other things should we expect from WhiteBIT in the coming months?
Vladimir Nosov: Later this month, we plan on adding crypto assets pairs featuring Ether, Litecoin, and Ruble to our margin terminal. This will ensure that traders have access to high liquidity, even if they opt for our profit-amplifying trading infrastructure. Likewise, in the coming months, we are looking to provide X25 leverage and allow users to multiply their chances of making more profits. All through this year, the team will continue to expand the functionalities of the WhiteBIT trading ecosystem to meet the demands of the ever-evolving crypto landscape.
Andrey Sergeenkov: Do you believe that the growth of the crypto landscape thanks to the influx of institutional entities is sustainable?
Vladimir Nosov: There is no reason why the crypto industry will not sustain the success achieved so far. There are lots of things unraveling in the background and fueling the crypto narrative. One of them is the state of the global economy. As long as the outlook of the traditional financial landscape remains uncertain, institutional investors and traders will continue to explore cryptocurrency. Therefore, the crypto industry is poised for long-term success.
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