Crypto.com CEO: Bitcoin May See Selling Ahead of Halving
Summary
TLDRThe transcript discusses the business environment in Hong Kong for digital assets and the recent regulatory framework changes, including the approval of Bitcoin and Ethereum ETFs. It highlights the company's strategy for entering the Korean market, emphasizing regulatory compliance and a focus on digital asset access. The conversation also covers expectations for the spot Bitcoin ETF and its impact on market structure, the upcoming Bitcoin halving event, and the company's growth plans, including user base expansion and strategic hiring. Additionally, it touches on the company's approach to sports sponsorships and brand building.
Takeaways
- 📈 Hong Kong's regulatory environment for digital assets has improved, with a new framework and conditional approval of Bitcoin and Ethereum ETFs.
- 🌏 The company is pleased with the support for market development in Hong Kong and sees it as a positive change.
- 🇰🇷 Entering the Korean market has been challenging, but the company has prepared for two years and aims to provide a competitive product offering.
- 🚀 Post-launch, the company plans to continue providing access to digital assets globally in a regulatory compliant manner, with a focus on the Korean market.
- 💳 The company is known for its crypto card program and aims to launch it locally in Korea as soon as possible.
- 📊 The demand for the spot Bitcoin ETF was larger than expected, indicating a positive structural setup for the market.
- 💹 Bitcoin halving is expected to have a long-term positive impact on the market by reducing supply, which could lead to price increases.
- 🔄 The crypto market structure is evolving, with an expected shift from retail to institutional investment driving prices.
- 🌐 The company is scaling up and has almost completed its regulatory licensing across major markets, positioning it for growth.
- 🏢 The company is hiring thoughtfully and strategically to ensure it remains a nimble and fast-moving entity in the rapidly developing cryptocurrency space.
- 🏆 Multi-year relationships with sports properties like F1 and UFC have established the company as a trusted global brand, and future partnerships will be selective.
Q & A
What changes in the Hong Kong environment regarding digital assets have been noted?
-There has been a new regulatory framework introduced in Hong Kong, and recently, conditional approval of Bitcoin and Ethereum ETFs has been granted, indicating general support for market development in the region.
How does the Hong Kong market compare to Korea in terms of interest in crypto among retail investors?
-South Korea is known for its high interest in crypto among retail investors and is one of the largest crypto markets globally, with a very active user base. Hong Kong, on the other hand, has shown a positive shift towards supporting the development of digital assets.
What preparations has the company made for its launch in Korea?
-The company has spent nearly two years preparing for the Korean launch, acquiring two licenses and undergoing a prolonged product buildout to offer a competitive product to Korean consumers.
What can users in Korea expect from the company post-app launch?
-Users in Korea can expect the company to continue providing access to digital assets on a global level in a regulatory compliant manner, and they are also looking forward to launching their crypto card program in Korea as soon as possible.
What is the long-term impact of the spot Bitcoin ETF on the market?
-The spot Bitcoin ETF is expected to bring structural changes to the market, with increased large scale inflows against the backdrop of reduced Bitcoin supply, potentially leading to a shift from retail to institutional investment driving Bitcoin prices.
How does the Bitcoin halving event in April impact the market?
-The Bitcoin halving event reduces the amount of new Bitcoin coming into the market by miners, which, while not immediately impactful, will make a substantial difference over a six-month period and is considered a positive development for the market.
What is the company's strategy for growth in the next six to twelve months?
-The company is focusing on scaling up, having almost completed their regulatory licensing in all major markets. They are also mindful of remaining a nimble, fast-moving company to capture opportunities, while continuing their efforts in brand building as a trusted place for cryptocurrency interactions.
How does the company plan to counter aggressive strategies from competitors like Chinese exchanges?
-The company has a different strategy focusing on building a solid foundation of regulatory compliance and brand trust. They aim to be the go-to place for people interacting with cryptocurrency, and are well-positioned to take advantage as some competitors facing regulatory issues.
What are the hiring plans of the company in relation to its expansion and long-term plans?
-The company is hiring thoughtfully and strategically, with several hundred openings outside of customer service. They scaled customer service by about 700 people recently to meet new demand and increase traffic.
Will the company continue with sports sponsorships such as F1 and UFC?
-The company values their multi-year relationships with these properties and will continue to be selective in their sponsorships, ensuring that they align with the brand's identity and contribute to its growth.
What is the company's stance on its user base and market penetration?
-The company is approaching a hundred million users and has hit 250 during this cycle. They believe they are still in the early stages of the market cycle and are focused on scaling their business in a sound and compliant manner.
Outlines
🌐 Hong Kong's Digital Asset Market and Korea Launch
The first paragraph discusses the positive changes in Hong Kong's environment and regulatory framework for digital assets, including the approval of Bitcoin and Ethereum ETFs. It compares the Hong Kong market to South Korea, highlighting the challenges for foreign players in Korea and the company's preparation for launching its app there. The discussion also covers the company's mission to provide global access to digital assets in a compliant manner and the anticipation of launching a crypto card program in Korea. The conversation turns to the spot Bitcoin ETF and its larger-than-expected demand, the structural setup of the market, and the impact of Bitcoin halving on the market dynamics.
🚀 Crypto.com's Strategy and Expansion Plans
The second paragraph focuses on the potential factors that could lead to the rise of Bitcoin's value and the long-term perspective on holding the asset. It outlines Crypto.com's user base growth and the current retail investor sentiment compared to previous cycles. The discussion moves to the company's strategy, emphasizing regulatory compliance, brand building, and the importance of scaling responsibly. The paragraph also addresses the competitive landscape with Chinese exchanges and the company's hiring strategies to maintain agility. Lastly, it touches on the company's sponsorship of sports events like F1 and UFC, and the selective approach to future partnerships.
Mindmap
Keywords
💡Digital Assets
💡Regulatory Compliance
💡Cryptocurrency ETFs
💡Retail Investors
💡Product Offering
💡Crypto Card Program
💡Bitcoin Halving
💡Market Consolidation
💡Strategic Hiring
💡Brand Building
💡Sports Sponsorship
Highlights
Positive changes in Hong Kong's environment and approach towards digital assets.
New regulatory framework for digital assets in Hong Kong.
Conditional approval of Bitcoin and Ethereum ETFs, indicating support for market development.
Comparison of Hong Kong and Korea in terms of market interest in crypto.
Challenges for overseas players entering the Korean market and strategies for long-term success.
Mission to provide global access to digital assets in a regulatory compliant manner.
Crypto card program as a significant product offering with plans for launch in Korea.
Spot Bitcoin ETF experiencing higher than expected demand and its implications.
Structural setup for Bitcoin with large scale inflows and reduced supply.
Inclusion of Bitcoin in the global financial system and its connection to equities and monetary policy.
General consolidation phase in the crypto market similar to previous cycles.
Expectation of significant market activity following the Bitcoin halving event.
Change in the crypto market structure due to the introduction of ETFs.
Impact of Bitcoin halving on market supply and its long-term effects.
Recommendation to hold Bitcoin for long-term investment horizons.
Crypto.com's strategy focusing on regulatory compliance and brand building for long-term growth.
Hiring plans and emphasis on remaining a nimble, fast-moving company.
Continued sports sponsorships with strategic selectiveness for brand alignment.
Transcripts
[CC may contain inaccuracies] First off, the pros and cons of doing business in Hong Kong.
Obviously, we are very pleased with the change in Hong Kong environment of
approach to digital assets. There has been a new framework that came
out from the regulatory perspective and this recent conditional approval of the
Bitcoin and Ethereum ETFs is a sign of a general support for the market
development in Hong Kong. So we're quite pleased with it.
And how does Hong Kong, compared to a market like Korea, for instance, where
there is great interest in crypto among retail investors and you're launching
your app at the end of the month? How do you expect to do in a market like
Korea? A Korea has historically been very
difficult for overseas players to enter, and we've spent almost two years
preparing for launch. It's obviously one of the largest
crypto markets globally with a very, very high adoption rate and extremely
active retail user base. So we'll see how do we are in it for the
long term. We've entered through acquisition of two
licenses and a very prolonged product buildout.
So we'll do our best to provide a competitive product offering to Korean
consumers. But in terms of products and services,
what can be expected after launching your app?
All right. We will give our mission is to provide
access to digital assets on a global level and doing it in a regulatory
compliance manner So users in Korea can expect us to continue in this fashion
being the trusted place where they could trade crypto and
a good selection of it further down the road.
And we are very well known for our crypto card program.
We are the largest reserve crypto card program globally.
We will do our best to launch it in Korea
locally as soon as possible. Chris, I want to talk about the spot
Bitcoin ETF. There was a bigger than expected demand
for it. What what assumptions are you making
about appetite going forward and the long term impact that may have?
I think structurally it's a very good setup.
You've got daily large scale inflows and this is against the backdrop of Bitcoin
having coming in a couple of days, which will reduce the supply side further.
So I think structurally this is well positioned.
Obviously, Bitcoin and crypto right now in general is a part of the global
financial system. So we are not completely disconnected
from what's happening in, in, in equities for example, and what's
happening with monetary policy or with what's happening in the geopolitical
environment. So
I think there's a general consolidation phase going on right now,
which is similar to the previous cycles, and I expect a pretty decent action in
the six months following the Bitcoin halving.
Do you see any change in terms of the crypto market structure on the back of
that, not to that ETF? Definitely.
Definitely. You know, those are flows that were
previously not present. So I would say that probably the
proportion of of Bitcoin prices being driven by retail
activity or small investor activity versus institutions is is changing
during the cycle. And, you know, the things that we look
forward to is the decision making on Bitcoin ETF apps and perhaps other
cryptocurrency ETFs or even cryptocurrency basket apps in the
future, because again, this may strengthen the flows.
Chris, you talked about that Bitcoin halving expected to happen in April.
And just wondering how much impact that may have given, you know, the kind of
demand we're seeing for that ETF of late.
Might that take away some of the impact? I would say that this just improves the
overall situation because you've got less Bitcoin coming into the market
that is being sold by the miners and you're just cutting this in half.
So you know, it won't make a difference over a day or two or a week, but over a
period of six months, it's it makes a substantial difference.
So I think this is a very positive development for the market.
One has to always remember that there is this buy the rumor, sell the news kind
of thing. So as we approach this this date, there
may be some selling coming out. Right.
And, you know, we're seeing an easing of bitcoin prices right now below 64,000 as
we speak. And just wondering, do you see the rally
continuing? What might
lead Bitcoin higher from here? Oh, again, I think this is a period of
consolidation we've seen exactly just in fact, it's happening in the previous
cycles. So this is an asset that you want to
hold for a very long period of time. You should measure it in years, if not
decades. So I strongly recommend everybody
who has this kind of time horizon to add it to their portfolio.
And I personally expect great performance over the next six months.
In terms of your own strategy at Crypto.com, how does it look like for
the next six, 12 months? Ask the soul about scanning the size of
the platform. We are approaching a hundred million
users, as you mentioned at the beginning.
We also hit 250 doing this cycle. The retail intent so far has been muted
comparing to the previous cycle. So it
gives us this kind of notion that we are still early into the early innings of
the cycle. So it's all about scaling.
And again, we've almost completed our regulatory licensing puzzle in all major
markets. So we were ready to grow the business as
fast as we possibly can. At a time when we're seeing pretty
aggressive strategies from Chinese exchanges.
How might you counter that? We have a completely different strategy
and in our view, where we're building this business to for the last decades.
Right. So from day one, we've created every
single customer on the platform. We followed very stringent
rules regarding anti-money laundering. So this is our way of building this
business. And we believe that if the market is
supposed to reach a billion people, it has to be done properly in a sound
foundation of regulatory compliance. So we parallel with
pretty decent efforts in terms of the brand building because we want to be the
trusted place for people to interact with cryptocurrency.
So I think that our strategy does not change.
Some of our competitors that's pursued somewhat aggressive tactics are now in
hot water and we are perfectly positioned to take advantage of that.
Chris, given your expansion plans and your long term plans as well, I mean,
what are your hiring plans on the back of that and which markets are likely to
drive growth? Right.
So where we are hiring right now, what we are doing so very thoughtfully and
strategically, we've got a couple hundred openings in the company outside
of the customer service, which we scaled by about 700 people in the last couple
of months. But outside of customer service to meet
the new demand and increase traffic, we are doing so very thoughtfully,
strategically. Again, we want to make sure that we
remain very nimble, fast moving company into the rapidly developing space so
that we can capture all the opportunities.
We don't want to be in a very large and slow moving corporate center.
That's just not how we want to build a company.
Any plans for sports sponsorship? Will you continue with F1 UFC, for
instance? Those are great properties and great,
great partners that we have multi-year relationships with.
I think we've already established ourselves as a globally recognized,
trusted brand. We will again be very selective moving
forward and speaking. Not all of these partnerships move the
needle for a brand like Crypto.com. So we want to make sure that whatever we
choose to do is true across and what we stand for as a brand.
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